Issue no.: 6/2016 June 201615

June

June

Submission of GST Return, Green Tax Return and payment of GST and Green Tax for May 2016

Payment of Tourism Land Rent for 3rd Quarter of 2016

Submission of financial statements of commercial banksfor 2015

Payment of Trade Fee for July 2016 and submission of Duty free royalty statement and sales report for June 2016

* If the deadline falls on a public holiday, then the last submission deadline would be the next working day

Important Deadlines

28

30

30

10

June

July

Withholding Tax deadline June 2016

15July

Duty free shops royalty payment for June 2016

15July

2

Taxpayer’s accounting period must be the period from

1January to 31 December

MIRA has issued a tax ruling (Tax Ruling: TR-2015/B45) requiring all taxpayers to have the accounting from 1 January to 31 December in any year. As per the ruling, taxpayers currently with an odd accounting period are required to request to MIRA in writing to change their accounting

period so as to align with the calendar year, by 31 December 2016.

Around 900 taxpayers who are required change the accounting period before the end of 2016 are yet to make the request to MIRA to change the accounting period. Since individuals already have their accounting periods aligned, companies and partnerships need to check whether their accounting period needs to be changed and complete necessary formalities.

When taxpayers with an odd accounting period end their accounting period on 31 December 2016, it results in a transitional accounting period which would be less than 12 months. Transitional accounting period would have separate filing requirements which are subject to some special rules. Comprehensive information on requirements applicable to the transitional accounting period is available from the Guide to Transitional Accounting Periods.

Ahmed Shimal, Senior Manager, Registration Processing

Commencing collection of Zakat al- mal by MIRAstarting 1 June 2016

Zakat-al-mal will be collected by MIRA starting 1 June 2016. The work carried out by Ministry of Islamic Affairs in the collection of Zakat-al-mal was handed over to MIRA in March with the signing of an MOU between the two authorities. MIRA offices outside Male’ will also accept

Faatheen Abdul Latheef, Senior Officer, Marketing and Public Relations

Zakat-al-mal collection. Also, Zakat-al-mal will be accepted from the councils in the islands where MIRA offices have not been established.

MIRA 510 form must be submitted when making the Zakat payments. This form is available in our website and Taxpayer Service Centre. It has been decided to collect only Zakat al-mal by MIRA and Fitr Zakat will still be collected by the Ministry of Islamic Affairs.

3

Currency and Exchange Rate to beused for the purpose of BPT

For the purpose of BPT, taxpayers are required to maintain accounting records in their “functional currency”. Functional currency is the currency of the primary economic environment in which taxpayer operates. Transactions in currencies other than functional currency must be recorded using a rate within ±2% of the rate published by the MMA, pertaining to the relevant date. If

functional currency is Rufiyaa, financial statements must be prepared in Rufiyaa. If functional currency is USD, financial statements must be prepared in USD. If functional currency is a currency other than Rufiyaa or USD, financial statements may be prepared in either Rufiyaa or USD.

Presentation currency is the currency in which financial statements are presented to MIRA. Presentation currency would differ from functional currency only if functional currency is a currency other than

Rufiyaa or USD. In such cases, either Rufiyaa or USD must be used as the presentation currency, and to translate financial statements to presentation currency a rate within ±2% of the rate published by the MMA, pertaining to the relevant date, must be used.

Taxpayers must prepare BPT return in their presentation currency. If presentation currency is Rufiyaa, BPT must be paid to MIRA in Rufiyaa. However, if presentation currency is USD, BPT may be paid to MIRA in either Rufiyaa or USD.

Mohamed Ali Waheed, Manager, Tax Training

MIRA conducts customer caretraining for the front line staff

MIRA has commenced a series of customer trainings aimed at the front line staff of MIRA, to ensure that the staff maintains professionalism when interacting with and providing services to the taxpayers. The trainings, started on 17 May 2016 with 33 staff, are scheduled to last until the end of this year.

Focus of the trainings includes techniques on improving communication skills of the staff, attending taxpayers’ queries promptly and how to become active listeners.

MIRA believes that such trainings will enhance the standard of the services provided by MIRA, and assist in maintaining the image of MIRA as a professional organization.

Aishath Saana, Senior Officer, Tax Training

4 5

May 2016

Commissioner General of Taxation Yazeed Mohamed watering the plant

MIRA staff participated in the tree planting event on 4 June 2016 organised by all independant legal entities. This is the first socio-cultural event carried out by the indepedant legal entities in the name of “Aaro”.

The Commissioner General of Taxation, Yazeed Mohamed signing on behalf of MIRA and Managing Director, Yameen Idhrees signing on behalf of Hajj Corporation.

The MOU was signed on 30 May 2016 in a ceremony held at MIRA, in order to facilitate the participation of MIRA staff in the salary deduction employee scheme and provide the opportunity for MIRA staff to perform Hajj pilgrimage.

MIRA staff cleaning the roads of Hulhumale’

MIRA staff took part in Hulhumale’ cleaning event organised by the Hulhumale’ Development Corporation. The event, in the name of “Saafu Hulhumale’ - Aharemenge Zinmaa”, was carried out in Hulhumale’ on 28 May 2016.

Tax Agents and Aditors who participated in the CPD program held by MIRA

Continuing Professional Development (CPD) program held every quarter for the licensed tax agents to provide them latest information, was held on 1 June 2016. The repeat of the program was also held on 8 June 2016. In addition to the seniors of MIRA, officials of the Maldives Monetary Authority also provided information. A total of 47 participated in the program comprising of tax agents and auditors.

6

1415

Deadline for submission of BPT

Return for 2015 is approaching near

MIRA 304

Non-filing Hotline

Non-payment Instructions on completing the

formMIRA 305

June 2016 30 Insurancecompanies

MVR 50/- per day of delay

of outstanding0.05%

amount per day

Guides

BPT

MIRA website

Judgments passed by the Civil Court in May 2016

7World tax news

GCC states to introduce VAT

Gulf Corporation Council (GCC) countries have agreed to introduce VAT in 2018 at the rate of 5%. VAT is another name for GST. GCC is an economic union consisting of all Arab states of the Persian Gulf. Its member states are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Taxation is considered an

alternative source of income for Gulf states hoping to move their economies and populations away from a dependence on oil and gas.

Darwish Al Beloushi, Oman’s Minister of Financial Affairs, told reporters on Monday that GCC countries have already reached a decision on the five per cent rate after negotiating on a rate between three and five per cent.

A spokesman from the UAE’s Ministry of Finance had earlier said GCC countries are yet to finalize their implementation policy, but they have agreed that the tax will not be applied on certain industries like education, and health care. He pointed that the UAE is expected to generate around Dh10 billion to Dh12 billion (USD 2.7-3.2 billion) as a result of introducing VAT in the first year of implementation alone.

Mariyam Jaida, Senior Officer, Planning and Statistics

*Amounts accounted for until end date of judgement

DefendantCourt Address Summary of Judgment Amount*

To pay the amount claimed by the within 45 days

To pay the amount claimed by the MIRA within 2 months

10471 Hulhumale, Maldives

Ahmed Sabir

Premium Beverages Pvt Ltd

Civil Court

Civil Court

MVR 55,326*

MVR 251,397*

Case withdrawn upon MIRA’s request, after settling the claimed amount.

The decision made by the Tax Appeal tribunal regarding case number TAT-CA-G/2013/001 was dismissed.

G. Aimaa, Male’, Maldives

Ahmed Abdul Azeez

Bunny Holdings (BVI) Ltd

Civil Court

High Court

(Execution of Judgment)

The judgement passed by the Civil Court regarding Gaziyya No. 343/Cv-C/2013

To pay the amount claimed by the MIRA within 45 days

To pay the amount claimed by the MIRA within 3 months

G. Sinamale 2, 11-01, Male’, Republic of Maldives

Dhaftharu no. 6735, Male’ Maldives

Medianet Pvt Ltd

Ali Abdul Raheem

Direct Logistics Services Pvt Ltd

High Court

Civil Court

Civil Court

MVR 41,910*

MVR 358,730*

8

Key points to consider whenpreparing the BPT return

In comparison to other tax returns, preparing a BPT return entails more work and several specific requirements. It is therefore critical that taxpayers start the preparation of the BPT return well in advance so that they have ample time to fulfil all the requirements diligently. Further, preparation of the BPT return involves tasks such as identifying and preparation of financial statements that must accompany the BPT return, and appointment of an auditor to audit the financial statements if required to. Hence, keeping such tasks to the last

minute would make filing the return by the deadline a very difficult task.

Regardless of their revenue, companies and partnerships must submit their BPT return. Individuals must submit BPT return if the revenue of 2015 reached MVR 750,000 or the taxable profit reached MVR 500,000. Individuals must also submit BPT return for 2015, if they submitted or were required to submit BPT return for 2014 irrespective of the revenue or profit generated.

In addition to the filing requirements and threshold, there are a number of factors which taxpayers need to pay attention to when submitting BPT returns. Some of the most common issues identified during the returns

processing stage include returns being prepared for incorrect accounting periods and financial statements of businesses with sales over MVR 5 million submitted without the required auditor’s report. Additionally, incorrect amounts being stated as loss carried forward from previous years or the profits/losses stated in returns not tallying with the amounts in the financial statements are also commonly found mistakes in BPT returns. By eliminating such errors and paying special attention to ensure all supporting documents are submitted along with the BPT return, taxpayers can avoid the hassle of having to correct the returns again and fines which might incur due to the return not being accepted by MIRA.

Shahid Moosa, Manager, Return Processing

Substantive matters are not up for dispute, when enforcement measures are appealed

at the Tax Appeal Tribunal: High Court

The High Court of Maldives has ruled that substantive matters are not up for dispute on cases appealed to the Tax Appeal Tribunal where MIRA has taken action to recover tax against a taxpayer who has not followed the stages stipulated in the Tax Administration Act with regard to objecting to a decision in relation to tax made by MIRA.

This judgement was passed on the Tax Appeal Tribunal decision appealed by MIRA. The Tax Appeal Tribunal had passed that GST assessed by MIRA as payable by Bunny Holdings (BVI) Ltd is not payable by the company. The case was filed by Bunny Holdings (BVI) Ltd when MIRA recovered the tax payable by the company by freezing the bank account of the company.

Faatheen Abdul Latheef, Senior Officer, Marketing and Public Relations

In accordance with the High Court judgement, the Tax Administration Act stipulates the procedure to be followed by the taxpayer when decisions in relation to tax are made by MIRA. In this regard, where a taxpayer objects to a decision made by the MIRA, such objection shall be notified to MIRA within 30 days from the date of notification of that decision, and where he is not satisfied with a decision made by the MIRA with regard to an objection, he shall have the right to appeal to the Tax Appeal Tribunal within 30 days from the date that the decision was made. If the taxpayer has not complied with these steps, the judgement states that the initial decision made by MIRA shall be legally binding. Additionally, the High Court judgement also stipulates that when the taxpayer has not acted in any of the aforementioned stages and as a result MIRA takes action to enforce its decision, disputes on substantive matters at this stage loses the need and purpose of the durations and provisions for objection and appeal stipulated in the Tax Administration Act.