Summary
Summary
The Maldives Government has submitted a Bill to amend the GST Act, proposing the introduction of the destination-based principle and taxation of inbound tourism products starting from October 1, 2026.
The Maldives Government is moving forward with amending the GST Act by shifting taxability rules to a destination-based principle for taxing goods (e-commerce) and online digital platforms in the travel and tour organizing sector.
On August 15, 2026, the Government submitted a Bill to amend the Goods and Services Tax Act(GST Act). The submitted Bill proposes a variety of substantive amendments to the existing GST framework. The principal provisions should expand the tax base of the main GST Act, with the introduction of the destination-based principle, and expand the tax base through the introduction of the GST regime to supplies made by non-resident tour operators and travel agencies.
Timeline
The part of the amended GST Act that introduces the implementation of the destination-based principle and taxation of foreign tour operators and travel agencies becomes effective on October 1, 2026.
GST Framework on Booking Service Providers
The proposed Bill should introduce a new GST regime for non-resident persons who supply inbound tourism products in the Maldives. According to the Bill, the inbound tourism product is a concept that includes accommodation, food, transport, and other tourism-related activities.
The proposed amendment to the GST Act, when it comes to the introduction of a specifically designated GST regime for foreign tour operators and travel agencies, looks to tax a broad scope of digital platform operators that provide any of the inbound tourism products.
The introduction of the destination-based place of supply rules and new GST regime for non-resident tour operators and travel agencies will bring into GST scope not only global leaders in the online booking accommodation services industry but also smaller online booking agencies and tour operators.
GST Framework for Suppliers of Inbound Tourism Products
Foreign tour operators, travel agencies, and other suppliers that supply or arrange Maldives tourism products are going to be held accountable for GST under the newly developed GST regime.
Taxation Rules Under New Regime
Tax Calculation on a margin basis – GST is calculated only on the margin(commission) earned by the non-resident supplier, rather than the gross amount paid by the user of the inbound tourism product. The “platform operator,” for example, will calculate tax payable on the earned booking commission(difference between what the user of the service paid and the amount transferred to the GST-registered domestic person)
The non-resident suppliers of inbound tourism products cannot claim input tax on purchases made concerning the latter supplies of the inbound tourism products.
New Place of Supply Rules
As previously mentioned, the Bill looks to expand the tax base through amendments of the place of supply rules. The new place of supply, read in conjunction with the new GST regime for foreign suppliers of inbound tourism products, will expand the taxability base to non-resident providers of intermediation services for supply of any of the inbound tourism products in the Maldives.
Alongside this shift, new place of supply rules for related supplies of goods will expand the taxability base to new e-commerce business models.
The proposed framework could affect non-resident businesses involved in supplying or arranging Maldives tourism products, including:
- Online booking platforms
- Foreign travel agencies
- Tour operators
- Accommodation booking intermediaries
- Businesses arranging local transportation
- Platforms facilitating other tourism-related activities
The precise GST treatment will depend on the role of the foreign business and the nature of the underlying transaction.
| Type | New rules |
| Goods | The place of supply will be the Maldives in situations where the supply involves transportation of goods and the transportation of the goods commences in the Maldives; or where transportation is not involved, where the goods are made available in the Maldives. |
| Services | The place of supply will generally be the Maldives where the services are supplied by or through a place of business of the supplier in the Maldives. Where the recipient is not a registered person in the Maldives, the service will be deemed to be supplied in the Maldives where: at the time of supply, a person in the Maldives is actively involved in the provision of the service; the service relates to immovable property situated in the Maldives; or the service comprises the provision of an inbound tourism product, or an agency or booking service in relation to an inbound tourism product. |
Takeaway
The amendments to the principal Maldives GST Act are going to significantly expand the tax base to foreign digital platform operators who are designated as tour operators or travel agency service providers. The Maldives Government is looking to equalize the playing field with the local competitors, and to increase the GST revenue from the suppliers who are part of these of the tourism-related business sector.
Author: Aleksandar Delic
Foreign digital platforms, who are in some manner related to the provision of the “inbound tourism products” in the Maldives, and who earn a commission on the facilitation of these services, are “one” of the principal targets of the GST regime, considering the total amount of revenue generated for the provision of these services within the country.
Indirect Tax Manager – E-commerce
Frequently Asked Questions
The Maldives Government has proposed amendments to the Goods and Services Tax Act that would introduce broader destination-based taxation rules and expand GST obligations for non-resident businesses involved in the Maldives tourism sector.
The changes particularly target foreign tour operators, travel agencies, booking platforms, and other providers involved in supplying or arranging inbound tourism products in the Maldives.
According to the proposed framework described in the Bill submitted on August 15, 2026, the new destination-based rules and GST treatment of foreign tour operators and travel agencies are intended to take effect from October 1, 2026.
Businesses should monitor the legislative process and final implementing requirements before the effective date.
The destination principle generally seeks to tax transactions where the relevant goods or services are supplied or consumed.
Under the proposed Maldives rules, the place of supply framework would be expanded to capture certain transactions connected with goods, services, and tourism activities in the Maldives, including supplies made or facilitated by non-resident businesses.
The proposed framework could affect non-resident businesses involved in supplying or arranging Maldives tourism products, including:
Online booking platforms
Foreign travel agencies
Tour operators
Accommodation booking intermediaries
Businesses arranging local transportation
Platforms facilitating other tourism-related activities
The precise GST treatment will depend on the role of the foreign business and the nature of the underlying transaction.
The proposed framework uses the concept of an inbound tourism product to cover tourism-related supplies in the Maldives.
These can include accommodation, food, transportation, and other activities associated with inbound tourism.
Agency and booking services connected with these products can also fall within the proposed place of supply framework.
Potentially, yes.
Foreign booking platforms that supply or arrange inbound tourism products in the Maldives could become subject to the new GST framework once the relevant statutory conditions are satisfied.
This could significantly expand the Maldives GST exposure of international online travel businesses that previously operated without a direct local GST obligation.
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