This ruling is issued pursuant to the authority granted under Section 84 of the Tax Administration Act (Law Number 3/2010) as amended by Law Number 14/2011. Unless otherwise stated, all legislative references are to the Business Profit Tax Regulation (Regulation Number 2011/R-35) as amended by Regulation Number 2011/R-47 and Tax Ruling Number TR-2012/B6, TR-2012/B11, TR-2013/B27 and TR-2013/B31. This ruling is legally binding.

Introduction

     1.  This ruling prescribes:

          (a)    the methods of calculation of the tax-free threshold and interim tax payments; and

          (b)    the due dates for filing returns and making tax payments,

          in respect of a transitional accounting period which results from the change in a taxpayer’s accounting period.  

     2.  Section 7 of the Regulation states that:

               “A Person’s accounting period shall not be changed without written consent of the MIRA, except on cessation of business.”

Ruling

     3.  Where a Person has been granted authorization to change his accounting period in accordance with section 7 of the Regulation (“the Person”), and such change results in an accounting period of less than 12 months (“the transitional accounting period”), the Person shall file a tax return and statement of interim payment, and pay the interim payment for the transitional accounting period, as prescribed in this ruling.

     4.  The tax-free threshold specified in section 7 of the Business Profit Tax Act, which is applicable to the transitional accounting period, shall be adjusted on a pro-rata basis, using the following formula:

          where A = the number of subsidiaries that are within the charge to tax in the Maldives.

     5.  The Person shall file a statement of interim payment and pay the interim payment for the transitional accounting period calculated using the formula below, on or before the interim payment deadline that falls within the transitional accounting period, determined in accordance with section 23 of the Business Profit Tax Act.

     6.  The Person shall calculate the interim payment payable for the accounting period immediately following the transitional accounting period using the following formula:

     7.  The Person shall file his tax return for the transitional accounting period on or before the deadline specified in section 17(d) of the Business Profit Tax Act, and pay the final payment for the transitional accounting period in accordance with section 24 of that Act.

     8.  The tax return referred to in paragraph ‎7 of this ruling shall be filed together with financial statements prepared in accordance with Tax Ruling Number TR-2013/B28 (Submission of financial statements and appointment of auditors (Revised)) issued on 31 January 2013.

     9.  This ruling is subject to section 20(d) of the Regulation.

Date of Effect

     10.  This ruling shall have effect from its date of issue.

This is the unofficial translation of the original ruling issued in Dhivehi. In the event of conflict between this translation and the Dhivehi version of this ruling, the latter shall prevail. Therefore, it is advised that both the Dhivehi version of this ruling and this translation be read concurrently.