Introduction
The President ratified the 8th Amendment to the Goods and Services Tax Act (Law No. 10/2011) on 31 August 2026.
The amendment introduces significant changes to the GST framework, primarily implementing the destination principle to levy GST in the jurisdiction where final consumption takes place. Consequently, supply of inbound tourism products and related agency/booking services by offshore platforms, foreign tour operators, and travel agencies without a physical presence in the Maldives will be subject to 17% TGST effective 1 October 2026.
The amendment also strengthens the overall GST regime through structural and technical refinements to existing statutory provisions.
Key Takeaway: The 8th Amendment introduces the destination principle to subject offshore booking platforms and travel agents to 17% TGST, revises definitions of goods/services, and expands specific exemptions.
Key Amendments
| AREA | KEY AMENDMENT | DETAILS |
|---|---|---|
| Inbound Tourism Products | Extension of 17% TGST to offshore suppliers and booking platforms | Inbound tourism products (accommodation, food, transport, activities) and related booking services by foreign entities without a physical presence are treated as supplies made in the Maldives. Subject to 17% TGST effective 1 October 2026. GST Calculation: Calculated on a margin basis where GST = (Consideration received − Amount paid to a registered person) × 17%. No input tax deduction is permitted. Registration: Suppliers must apply for registration within 30 days of the effective date or 30 days within commencing taxable activities. |
| Revised Definition of Goods and Services | Narrowed definition of goods to tangible items; intangibles reclassified as services | Goods: Defined as tangible movable and immovable goods, excluding money and goods transmitted via electronic/electromagnetic technical systems. Exclusions for rights or contractual interests were removed. Services: Defined as anything that does not constitute “goods”, except money. Intangible goods (e.g., long-term leases of villas under strata titles) may now be characterized as services and subject to GST. |
| Tourism Goods and Services Definition | Removal of requirement that supply must be ordinarily made to customers of tourist establishments | Changes the basis for determining tourism goods/services, effectively reversing the precedent set in Maldives Bay Private Limited v MIRA [2023] SC 12. |
| Expansion of Exempt Supplies | Exemptions added for qualifying state projects and waste management | State-related Projects: Supplies to state offices or state-owned enterprises under foreign loan/grant agreements are exempt if the agreement specifies GST exemption. Waste Management: Exempts supplies made by licensed waste management service providers. |
| Other Structural & Technical Amendments | Codification of regulations into Act and compliance updates | Incorporates rules on registration/deregistration, 5-year record-keeping, time-of-supply rules, and chartering of tourist vessels directly into the Act. Provisions take effect 31 August 2026 (except inbound tourism rules taking effect 1 October 2026). |
Considerations for Businesses
- Offshore booking platforms, foreign tour operators, and overseas travel agents must prepare for GST registration and operational compliance before 1 October 2026.
- Businesses engaging in long-term strata villa leases should assess GST implications under the revised definitions of goods and services.
- Inbound tourism service providers should adjust pricing models and systems to account for margin-based TGST without input tax deductions.
- Entities involved in government loan/grant-funded projects should review contracts to confirm explicit GST exemption terms.
- Licensed waste management providers should update tax configurations to reflect exempt status.
- Businesses should ensure record retention procedures comply with the 5-year statutory requirement.
