Foreign tour operators, offshore booking platforms and travel agents selling Maldives tourism products could be required to pay Goods and Services Tax (GST) from October under a government-backed amendment submitted to Parliament.
The proposed changes are expected to generate an additional MVR 1.6 billion in annual state revenue by extending the country’s GST regime to overseas businesses that earn income from tourism services provided in the Maldives, even when those companies do not maintain a physical presence in the country.
The bill was submitted on behalf of the government by Kulhudhuffushi North MP Mohamed Dawood and seeks to introduce clearer rules determining when goods and services should be considered as being supplied within the Maldives for taxation purposes.
A major focus of the amendment is the application of the destination principle, under which consumption is generally taxed in the jurisdiction where goods or services are ultimately used. The proposed framework would allow the Maldives to collect GST from foreign businesses selling or facilitating tourism products consumed within the country.
Under the bill, foreign tour operators, travel agents and online booking platforms offering inbound tourism products would fall within the GST framework regardless of whether they have a permanent establishment in the Maldives.
Inbound tourism products are defined under the proposed amendment to include tourism-related services delivered within the Maldives, including accommodation, food and beverage services and transportation.
The changes would also establish clearer criteria for determining whether other goods and services are supplied domestically. Goods would be regarded as supplied in the Maldives when transportation begins in the country or when arrangements are made by the supplier for the goods to be delivered or made available locally.
Services provided through a place of business operating in the Maldives would similarly be considered locally supplied.
The proposed framework goes further in relation to non-resident businesses. Services provided by an overseas company could still be treated as supplied in the Maldives when the physical activity associated with the service takes place in the country or when it relates to land or other immovable property located in the Maldives.
Agency and booking services connected to inbound tourism products would also come within the scope of the new rules.
If approved, the GST requirements covering inbound tourism products supplied by non-resident businesses are scheduled to take effect on October 1, 2026.
The government estimates that bringing offshore booking platforms, foreign tour operators and overseas travel agents into the tax framework could generate approximately MVR 1.6 billion each year, providing a significant additional source of revenue for the state.
Tourism remains the Maldives’ largest economic sector and a major contributor to government revenue. A substantial share of bookings for resorts and other tourism services is facilitated through international tour operators and online platforms headquartered outside the country.
The proposed amendment seeks to close gaps in the existing framework by ensuring that businesses generating revenue from tourism products consumed in the Maldives are brought within the tax system, while also addressing practical difficulties authorities have encountered in enforcing GST requirements on businesses operating from overseas.
