Maldives to Increase Tourism Sector GST rate to 17% from 1 July 2025
BACKGROUND
This Legislative Insight is about a change in the Tourism Goods and Services Tax (TGST) rate in the Maldives.
The change was made through the Seventh Amendment to the Goods and Service Tax Act (GST Act) [1], published on 5 November 2024 [2].
WHAT IS CHANGING?
Starting from 1 July 2025, the TGST rate will increase from 16% to 17%.
This applies to the following categories:
⦿ Tourist resorts, resort hotels, hotels, guesthouses, tourist vessels, picnic islands, and private islands [3]
⦿ Shops, cafés, restaurants, spas, diving schools, and water sports providers located within those establishments (excluding shops and cafés that operate only for staff) [4]
⦿ Registered travel agencies [5]
⦿ Services provided to foreign tourist vessels through their local agents [6]
⦿ Domestic flights when provided to non-Maldivian passengers [7]
Make sure to apply the new 17% TGST rate to all goods and services supplied on or after 1 July 2025. Use the time of supply rules to determine when a good or service is considered supplied.
If your business operates 24 hours, apply the new rate to all supplies made from 00:00 hours on 1 July 2025.
For other businesses, make sure to charge the 17% rate on all goods and services supplied after opening for business on 1 July 2025.
WHAT YOU SHOULD DO?
⦿ Review and update your pricing, billing, and accounting systems.
⦿ Ensure your point-of-sale systems reflect the 17% rate from 1 July 2025.
⦿ Notify customers and business partners if necessary.
NEED HELP?
Further administrative guidelines may be issued by the Commissioner General of Taxation under this law [8] and hence we encourage you to contact us for tailored advice on how to stay compliant.
REFERENCES
[1] Section 15(b)(5) of the Goods and Services Tax Act (Law No. 10/2011) as amended by the Seventh Amendment to Goods and Services Tax Act (Law No. 20/2024)
[2] Government Gazette Publication Date
[3] Section 15(a)(1) of GST Act
[4] Section 15(a)(2) of GST Act
[5] Section 15(a)(3) of GST Act
[6] Section 15(a)(4) of GST Act
[7] Section 15(a)(5) of GST Act
[8] Section 15(e) of GST Act