Issue no.: 4/2016 April 201615

April

April

Submission of GST Return and payment of GST for March2016 and 1st Quarter 2016

Submission of Green Tax Return for March 2016 andpayment of Green Tax

Payment of Trade Fee for May 2016

Duty free royalty statement and sales report submission for April 2016

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

Important Deadlines

28

28

10

10

May

May

Withholding Tax deadline April 2016

15May

Duty free shops royalty payment for April 2016

15May

Online businesses have to be registered in MIRA

2

BUY

Online businesses haveto be registered in MIRA

Most people are now living a ‘digital’ life where they do most of the things online and expect anything to be possible through mobile phones and devices. B2C (Business to consumer) ecommerce sales have reached trillions of dollars as of 2015 where Asia-pacific is the largest regional market in the world. Despite the small population, 58.4% of Maldivians are internet users as of 2015. (Source: http://www.internetworldstats.com)

Most people are still neglectful of their tax obligations when entering the Ecommerce market or even brick and mortar businesses. As we have a self-assessment tax system, it is important that entrepreneurs find out and fulfill their obligations such as obtaining the required trade permits and completing the tax registration.

A person whose average monthly gross revenue earned from all business activities, including online businesses, during any

Ahmed Shimal, Senior Manager, Registration Processing 12-month period exceeds MVR 20,000 (Twenty Thousand Rufiyaa) is required to register with Maldives Inland Revenue Authority (MIRA). Furthermore, if the goods sold online are imported goods, the person must obtain a trade permit from the Ministry of Economic Development to sell imported goods. The business, subsequently, must be registered with MIRA.

All businesses generating gross annual sales of over MVR 1 million or holding an import license are required to register for Goods and Services Tax (GST). Those who have already registered their online businesses with MIRA for Business Profit Tax (BPT) should maintain proper records in order to check if they meet the annual sales requirement for GST registration. Once an online business is registered for GST, they shall display their TIN in a visible place on their online page, together with a logo designated by MIRA to indicate that the business is registered for GST. Buyers should also be more conscious about the amount being paid for a product sold online. It should be noted that GST can only be charged if the seller is registered for GST.

MIRA has signed a Memorandum of Understanding (MoU) with Ministry of Islamic Affairs today, in which the collection of Zakat al-mal by MIRA will commence on 1 June 2016. Under this MoU, training and awareness programs on Zakat al-mal will also be carried out by MIRA from here on.

The MoU was signed today at 1000hrs in a ceremony held at Islamic Centre

Hall. The Commissioner General of Taxation, Yazeed Mohamed signing on behalf of MIRA and Minister of Islamic Affairs, Dr. Ahmed Ziyad signing on behalf of Ministry of Islamic Affairs.

Speaking at the MoU signing ceremony, Commissioner General of Taxation stated that MIRA will cooperate with the Ministry in order to facilitate the efficient implementation of Zakat system and to create awareness on Zakat al-mal among businesses and other relevant people of the society.

Minister of Islamic Affairs noted that a very low contribution is received as Zakat al-mal even though Zakat al-mal is one of the important principles of Islam. He believes that in the context of MIRA being experienced in the implementation of the tax system, the collection of Zakat al-mal will be carried out more efficiently than now.

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.

Mohamed Haamy, Senior Officer, Marketing and Public Relations

3

Service close to your home

Aishath Suha, Manager, Payment Processing

MIRA always works and further plans towards introducing and sustaining excellence in the service provided, and with the same intention, MIRA has worked towards spreading its reach beyond the geographical distance.

To inaugurate an additional branch of MIRA at Malhos Madulu Dhekunuburee Eydhafushi, an official ceremony was held on 31 March 2016. The branch was declared open by the Commissioner General of Taxation and Minister of Finance & Treasury along with Malhos Madulu Dhekunuburee Atoll Council President. The services available from this branch include registration of businesses, filing tax returns and collection of all taxes and

other fee payments paid to MIRA.

The task of establishing additional collection centres and branches

in atolls is progressing rapidly. Currently MIRA has 4 branches and 2 collection centres established outside of Male’.

Opening of Eydhafushi Branch

Opening of Eydhafushi Branch

4

MIRA employees

visits patientsin I.G.M.H

Employees of MIRA visits patients in I.G.M.H, during which all patients were given a special gift by the employees. All staff of MIRA and many staff of I.G.M.H participated in the event held today at 16:00hrs. The opening ceremony of the event was inaugurated by the Commissioner General of Taxation Yazeed Mohamed and Deputy C.E.O of IGMH Mohamed Rishwan.

Speaking at the event, Commissioner General of Taxation stated that the purpose of carrying out this event is to enliven the habit of visiting patients in need. Also, such activities are carried out with pride and will continue carrying out such activities needed for the communities’ wellbeing. He also noted the support received from I.G.M.H and thanked the personnel’s involved. Deputy C.E.O of IGMH Mohamed Rishwan stated that he was highly pleased that employees of MIRA initiated and planned such an activity to visit patients in I.G.M.H.

Faatheen Abdul Latheef, Senior Officer, Marketing and Public Relations

5

Summoning persons tothe MIRA

Legal Service

During an investigation carried out by the MIRA regarding an offence related to taxes, who would be summoned to the MIRA? What might be the purpose of summoning such persons? Are there any protocols to be considered by the MIRA before summoning a person? Surely, these are questions that may be asked by a number people. In fact, such questions ought to be expected. Simply put, the MIRA is required to follow certain procedures in the event that the MIRA summons any person in relation to an investigation.

One of the main purposes of an investigation carried out by the MIRA is to find evidence of the alleged offence. Pursuant to the Tax Administration Act, the MIRA, in its capacity as the administrator of the Taxation Acts, has been granted a number of powers to conduct comprehensive investigations to find such evidence. The power to summon persons as part of an investigation is one such power vested in the MIRA in order to conduct a comprehensive investigation.

The Tax Administration Act states that once an Audit Notice has been issued, MIRA could summon the taxpayer, or any other person who the MIRA believes may possess any information regarding the tax affairs of the taxpayer, for questioning. The procedures that the MIRA is required to follow when exercising that power includes, informing the person to be summoned 12 hours prior to the time of appearance, providing, in writing, the reason that the recipient is being summoned, along with the time and place to where the recipient should appear. If the

recipient of such summons order is unable to attend due to a reasonable excuse, he should inform the MIRA 1 hour prior to the time of appearance.

The MIRA does not make the decision to summon any person, unless it is believed that the statement of the summoned person is necessary for the investigation carried out by the MIRA. There are set procedures to be followed in case the summoned person does not comply with the summons notice.

As per an amendment to the Tax Administration Regulation through Tax Ruling no TR-2016/A5, where a recipient of a summons order fails to appear in accordance with said order without a reasonable excuse or refuses to receive the order for two consecutive instances, such persons shall be made to appear with the assistance of the Maldives Police Service. As mentioned previously, the reason for such measures is to obtain a statement which is necessary for an investigation. It is likely that the information provided by the summoned person will speed up the investigation process and allow justice to prevail.

Moreover, the judge’s bench of case no 2016/HC-A/82 deliberated in the High Court of the Maldives, found that the action of repeatedly failing to appear to a summons order issued by the MIRA was an obstruction of the responsibilities of the MIRA to investigate tax related offences. The High Court ordered the Maldives Police Service to present the recipient of the summons order to the MIRA. Therefore, it is important to cooperate with the MIRA staff and investigations conducted by the MIRA.

6

MIRA introduces a logo for MIRA approved charitable

organizations

MIRA has introduced a logo to be used by charitable organizations. The logo indicates that the organization is approved by MIRA. Displaying MIRA approved logo would assist in attracting donations from businesses.

A Body, association or public institution which is approved by the MIRA and established for the promotion of Islam, relief of the poor, medical relief or education or any other object of similar general public utility, is

exempt from Business Profit Tax. Donations given to such organizations by businesses can be deducted as an expense when computing the taxable profit of that business.

The tax ruling issued to introduce the logo on 31 March 2016 (Number TR-2016/B52) states that the logo designed by MIRA can be used by such associations on their marketing materials, letterheads, website, e-mail, and other such materials. However, associations and public institutions which are not approved by MIRA are not allowed to use the logo.

Charitable organizations are highly dependent on businesses to get the

funds they need to organize their programs and events. Businesses are less reluctant to give donations to MIRA approved charitable organizations since the amount given as donation is allowed to be deducted as an expense. Furthermore, the fact that the MIRA approved charitable organizations are required to submit an annual report to MIRA and the activities carried out by such organizations are closely monitored by MIRA gives the assurance to the businesses that the donations given by them are not abused or misused. Therefore, the logo introduced by MIRA is a powerful marketing tool that will help charitable organizations to attract donations.

Aishath Saana, Senior Officer, Tax Training

7World tax news

Famous Football Star Neymar to Pay $53

Million for Tax Evasion

A Brazilian court has ordered Neymar to pay 188.8 million reais (53 million US dollars) in back taxes, interest and fines after finding him guilty of tax evasion.

A judge at a federal court in Rio de Janeiro ruled that Neymar failed to declare earnings from his current club Barcelona, former club Santos and sponsor Nike, the Folha de S.Paulo newspaper reported.

The 24-year-old is expected to appeal the decision.

According to the judge’s finding, Neymar used a front company to avoid paying 63.6 million in taxes.

The decision came just weeks after a Brazilian court freezed assets belonging to Neymar worth 192.7 million reais, including a private jet, yacht and several properties.

Neymar’s representatives did not immediately respond to requests for comment.

The Brazil national team captain and his father, Neymar Sr, are also facing fraud allegations in Spain related to the forward’s 2013 move to the Camp Nou from Santos.

Photo: www.fifa.com (24 March 2016)Article: crienglish.com (19 March 2016)

First CPD

Program of the

yearAishath Saana, Senior Officer, Tax Training

MIRA conducted the Tax Agents Continuing Professional Development (CPD) program for the first quarter of 2016 on 16th March. A repeat of the program was held on 6 April 2016. Under the Tax Agents Regulation, it is mandatory for the licensed tax agents to complete the CPD programs run by MIRA in order to maintain their license. A total of 37 individuals participated in the program. In addition to tax agents, auditors registered with MIRA were also invited by MIRA to take part in the CPD program. The purpose of conducting the CPD program is to keep the licensed tax agents up to date on the amendments to the tax laws and regulations, recent tax rulings and other tax related information which would assist them to carry out the tax obligations of their clients more effectively and efficiently.

8

JudgmentsJudgments passed by the Civil Court in March 2016

*Amounts accounted for until end date of judgement

Defendant Address Summary of Judgment Amount*

To pay the amount claimed by the MIRA in equal parts on a monthly basis within 3 months from the date of judgment and to make the first payment before the end of March 2016.

-Foodie’s Pvt Ltd MVR 105,031

To pay the amount claimed by the MIRA within 3 months from the date of judgement

G. Sinamale 2, 11-01, Male’,

Republic of Maldives

Mohamed Athyf MVR 582,225

To serve 1 (one) month house arrest and to comply with the Judgment passed under Gaziyya Number 1352/Cv-C/2012

G. Sinamale 2, 11-01, Male’,

Republic of Maldives

Ahmed Naseer Ali (Execution of Judgment)