Worldwide transfer pricing reference guide 2014

Maldives
Taxing authority and tax law
Taxing authority: Maldives Inland Revenue Authority (MIRA).
Tax law: Law No. 5 of 2011 (Business Profit Tax Act) and its supporting regulations and rulings.
Relevant regulations and rulings
The Maldives Business Profit Tax Act contains transfer pricing provisions under the Tax Avoidance section. This section applies where the
computation of the taxable profits of a person for a tax year takes into account a transaction entered into directly or indirectly between
that person and another person and those two persons are associated with each other.
MIRA either may disregard or apply arm’s length terms in assessing tax.
In the Business Profit Tax Act persons are associated if:
• One controls the other or both are controlled by the same person.
• One is a relative of the other.
Person is relative of another if he or she is:
• The individual’s spouse
• A brother, sister, parent, grandparent, or child of the individual or the individual’s spouse
• A spouse of a person given above and a child includes a step child
OECD guidelines treatment
In general, the transfer pricing requirements follow the OECD Guidelines.
Priorities/pricing methods
The arm’s length price is determined on the basis of comparison with similar goods or services provided between unrelated parties.
Transfer pricing penalties
Financial penalties in the form of interest and fines shall be imposed for non-compliance with business profit tax rules and may apply in
case of deficiency assessment due to transfer pricing adjustments.
Penalty relief
There are no penalty relief provisions in place.
Documentation requirements
There are no specific documentation requirements.
Documentation deadlines
There are no documentation deadlines.
Statute of limitations on transfer pricing assessments
• Transfer pricing assessment is a part of the regular business profit tax by the MIRA.
• The MIRA may serve a notice of inquiry on the taxpayer within 12 months from the date of submission of the return for BPT.
• The MIRA can conduct tax assessments up to three years from the date of service of notice of inquiry.
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