What is Remittance Tax?

Remittance Tax is a tax imposed on money transferred out of the Maldives by “foreigners employed in the Maldives”. Remittance Tax, which is collected at the rate of 3% of the remitted amount, came into effect on 1 October 2016. It is imposed pursuant to the Fifth Amendment to the Employment Act (Law Number 22/2016), which was ratified by the President on 25 August 2016. “Foreigners employed in the Maldives” refers to “foreigners who have been issued a work visa pursuant to the Maldives Immigration Act (Law Number 1/2007) and foreigners who are not allowed to work in the Maldives without a work visa, even though such visa has not been issued or the visa has expired.”

Banks and money transfer agencies operating in the Maldives are responsible for collecting the tax from foreigners employed in the Maldives at the point of remittance. Banks and money transfer agencies are required to file a monthly Remittance Tax Return with MIRA by the 15th day of the following month, and remit the tax collected during the month to MIRA by that date.


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FAQ

1 - What is Remittance Tax?

Remittance Tax is a tax imposed on money transferred out of the Maldives by foreigners employed in the Maldives. It is imposed pursuant to the Fifth Amendment to the Employment Act (Law Number 22/2016), which was ratified by the President on 25 August 2016.

2 - What is the rate of Remittance Tax? How is it computed?

Remittance Tax is collected at the rate of 3% of the remitted amount. For example, if you remit USD 500 (after deducting bank charges), you must pay the equivalent of USD 15 as Remittance Tax.

3 - When did Remittance Tax become effective?

Remittance Tax came into effect on 1 October 2016.

4 - Who collects the tax from foreigners employed in the Maldives?

Banks and money transfer agencies operating in the Maldives are responsible for collecting Remittance Tax from foreigners employed in the Maldives.

5 - Who are “foreigners employed in the Maldives”?

“Foreigners employed in the Maldives” refers to foreigners who have been issued a work visa pursuant to the Maldives Immigration Act (Law Number 1/2007) and foreigners who are not allowed to work in the Maldives without a work visa, even though such visa has not been issued or the visa has expired. Therefore, only foreigners who belong to the “work visa” category will be required to pay Remittance Tax.

6 - Do Maldivian citizens have to pay Remittance Tax?

No, Maldivians are not required to pay Remittance Tax.

7 - Do other categories of visa holders (e.g. diplomatic visa, business visa, dependent visa, resident visa, etc.) have to pay Remittance Tax?

No, only work visa holders and those who are supposed to hold a work visa are required to pay Remittance Tax.

8 - What is considered as a “remittance”?

“Remittance” refers to the transfer of money out of the Maldives through a bank or money transfer agency, and to the withdrawal of cash from a bank account opened in the Maldives, outside the Maldives. Withdrawals, however, would be subject to Remittance Tax only from a date determined by the Commissioner General of Taxation. This date has not been announced yet.

9 - If I withdraw cash from my Maldives bank account outside the Maldives, do I have to pay Remittance Tax on that transaction?

Withdrawals would be subject to Remittance Tax from a date determined by the Commissioner General of Taxation. This date has not been announced yet.

10 - If I use my Maldives debit card to pay for goods and services outside the Maldives, do I have to pay Remittance Tax on that transaction?

No, such transactions would not be subject to Remittance Tax.

11 - If I carry cash when I depart from the Maldives, do I have to pay Remittance Tax?

No, you do not have to pay Remittance Tax on hand carried cash.

12 - Can a bank or money transfer agency insist that I pay Remittance Tax in US Dollars?

Banks and money transfer agencies must not insist remitters to pay Remittance Tax to the bank or money transfer agency in any currency other than Rufiyaa. However, if the remitter agrees to pay the tax component in any other currency, the bank may collect it in that currency.