Business Profit Tax: Submission of financial statements and appointment of ... Tel: (960) 3322261, Fax (960) 331 6577,E-
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MALDIVES INLAND REVENUE AUTHORITY Ma16, Republic of Maldives
TAX RULING Business Profit Tax: Submission of financial statements and appointment auditors
of
ReferenceNo.: TR-2012/85 Date of
issue:
Monday, 16 Apnl2012
This ruling is issued pursuant to the authority granted under section 84 of the Tax Adrninistration Act (Inw Number 32010) as amended by Law Number 14/2011. All legislative references are to the Business Profit Tax Regulntion (Regulation Number 2011/R35) as amended by Regulation Number 2011/R-47 unless otherwise stated. This ruling is legally binding.
Introduction 1. This ruling applies in respect of section 8(d),
13, 14 and 15.
2.
This ruling explains the requirement to submit financial statements by taxpayers and the requirement to appoint auditors by various categories of taxpayers.
3.
This ruling also sets out the requirements for registration of auditors by the MIRA.
RuIing Submission of financial statements 4. Pursuant to section 13 and 15, the following documents are to be submitted together
5.
with a person's business profit tax return: (a) Statement of Comprehensive Income (Profit and Loss Statemen0; and (b) Statement of Financial Position (Balance Sheet); and (c) Statement of Cash Flows (Cash Flow Statement); and (d) Statement of Changes in Equity; and (e) Notes to the financial statements; and (f) Auditors'Report. Notwithstanding paragraph 4 of this ruling, persons other than companies and large businesses as defined in paragraph 13(a) of this ruling shall not be required to submit the documents specified in paragraph 4(c) and (d) of this ruling.
Maldives Inland Revenue Authority, T-Building, Ameenee Magu,Male' 2}379,Maldives Tel: (960) 3322261, Fax (960) 331 6577,E-mail:
[email protected], website: www.mira.gov.mv
- a-
6.
Notwithstanding paragraph 4 and 5 of this ruling, persons who have made an election under section 8(d) shall not be required to submit the documents specified in paragraph 4(b), (c), (d) and (0 of this ruling.
7.
Notwithstanding anything to the contrary in this ruling, individuals whose only income during an accounting period is rental income from immovable property in the Maldives, shall be exempt from submitting the documents specified in paragraph 4 of this ruling together with their tax return if they have made an election under section 9 of the Business Profit Tax Act (Law Number 5/2011) for a tax year.
Requirement to audit financial statements 8. The Auditors' Report referred to in paragraph 4(f) of this ruling shall be signed by an independent auditor registered with the MIRA. 9. The auditor referred to in paragraph 8 of this ruling must be registered with the MIRA at the time of submission of the taxpayer's tax return for a tax year. 10. An Auditors' Report issued by a firm registered with the MIRA in accordance with this ruling shall be signed by a partner of the firm who is a resident of the Maldives and whose association with that firm has been disclosed to the MIRA. 11.A11 audits conducted for the purpose of the Business Profit Tax Act shall be in accordance with International Standards on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). Appointment of auditors 12. Pursuant to section 14, persons who are required to submit an Auditors' Report together with their business profit tax return shall appoint an independent auditor in accordance with this ruling. 13. For the purpose of this ruling, taxpayers shall be classified into micro, small, mediumsized and large businesses in accordance with the following criteria: (a) A business with an annual turnover in excess of MVR 100 million shall be classified as a large business; (b) A business with an annual turnover between MVR 50 million and MVR 100 million shall be classified as a medium-sized business; (c) A business with an annual turnover between MVR 10 million and MVR 50 million shall be classified as a small business; (d) A business with an annual turnover of less than MVR 10 million shall be classified as a micro business. 14. All large businesses shall appoint a Category A auditor registered with the MIRA in accordance with paragraph 19 of this ruling. 15. All medium-sized businesses shall appoint a Category A or Category B auditor registered with the MIRA in accordance with paragraphs 19 to 2I of this ruling.
Y,
Maldives Inland Revenue Authority, T-Building, Ameenee Magu, Male, 20379, Maldives Tel: (960) 3322261, Far (960) 331 6577, E-mail:
[email protected], website: www.mira.gov.mv
-3All small businesses shall appoint a Category A, B or C auditor registered with the MIRA in accordance with paragraphs 19 to23 of this ruling. 17. All micro businesses shall appoint a Category A, B, c or D auditor approved by the MIRA in accordance with paragraphs 19 to25 of this ruling. 18. Notwithstanding paragraphs 14 to 17 of this ruling, the following businesses shall appoint a category A auditor registered with the MIRA in accordance with 16.
paragraph 19 of this ruling:
(a) Financial institutions; (b) Public limited companies. Category A auditor 19. For the purpose of this ruling, firms satisfying the following criteria shall be classified
under Category A: (a) The firm must be registered with the Ministry of Economic Development; and (b) The firm must contain at least one partner who:
(i) (ii)
(iii) (iv)
is resident in the Maldives: and is a fully qualified member of a professional accountancy body recognized by the MIRA; and
a practicing
certificate from a professional accountancy body recognized by the MIRA; and has gained post-qualification experience of not less than 10 (ten) years in
holds
audit or assurance services. Category B auditor 20. For the purpose of this ruling, individuals satisfying the following criteria shall be classified under Category B: (a) The individual must be a fully qualified member of a professional accountancy body recognized by the MIRA; and (b) The individual must hold a practicing certificate from a professional accounrancy body recognizndby the MIRA; and
(c) The individual must have gained experience of not less than 5 (five) years in audit
2I.
or assurance services. For the purpose of this ruling, firms satisfying the following criteria shall be classified under Category B: (a) The firm must be registered with the Ministry of Economic Development; and
(b) The firm must contain at least one partner who is resident in the Maldives and meets the requirements in paragraph 20 of this ruling.
Maldives Inland Revenue Authority, T-Building, Ameenee Magu, Male' 20379, Maldives Tel: (960) 3322261, Far (960) 331 6577,E-rnait:
[email protected], website: www.mira.gov.mv
-4Category C auditor 22.For the purpose of this ruling, individuals satisfying the following criteria shall be classified under Category C:
(a) The individual must have obtained a postgraduate qualification in accountancy or auditing or be a fully qualified member or affiliate member of a professional accountancy body recognized by the MIRA; and (b) The individual must have gained experience of not less than 2 (two) years in audit or assurance services. 23. For the purpose of this ruling, firms satisfying the following criteria shall be classified under Category C: (a) The firm must be registered with the Ministry of Economic Development; and
(b) The firm must contain at least one partner who is resident in the Maldives and meets the requirements in paragraph 22 of this ruling. Category D auditor 24.For the purpose of this ruling, individuals satisfying the following criteria shall be classified under Category D: (a) The individual must have obtained an undergraduate qualification in accountancy or auditing or be a fully qualified member or affiliate member of a professional accountancy body recognizedby the MIRA; and (b) The individual must have gained experience of not less than 1 (one) year in audit or assurance services. 25. For the purpose of this ruling, firms satisfying the following criteria shall be classified under Category D:
(a) The firm must be registered with the Ministry of Economic Development; and (b) The firm must contain at least one partner who is resident in the Maldives and meets the requirements in paragraph 24 of this ruling.
hofessional accountancy bodies recognized by the MIRA 26.For the purpose of this ruling, "professional accountancy bodies recognized by the MIRA" means any professional accountancy body recognized by IFAC. 27. Notwithstanding paragraph 26 of this ruling, the Commissioner General of Taxation may, at his discretion, recognize a professional accountancy body not recognized by
IFAC. Registration of auditors 28.Individuals and firms that wish to register with the MIRA in accordance with this ruling shall submit a completed "Auditor Registration" (MIRA 109) form together with the information and documents specified therein, to the MIRA.
t
Maldives Inland Revenue Authority, T-Building, Ameenee Magu,Male' 20379, Maldives
Tet (960) 3322261, Fax: (960) 331 6577, E-mail:
[email protected], Website: www.mira.gov.mv
-529. Applicants approved by the Commissioner General of Taxation shatl be issued with a Certificate of Registration which shall include the Auditor Registration Number of the
individual or firm. 30. The Commissioner General of Taxation may at any time cancel the registration of any individual or firm where the Commissioner General believes that the individual or firm: (a) has committed any offence specified in the tax laws of the Maldives; or (b) has violated professional ethical standards; or (c) no longer satisfies the criteria for registration of the individual or firm specified in this ruling.
Date of Effect 31. This ruling shall take effect from its date of issue.
Mo ommissioner azeed
This is the
d eneral of Taxation
unfficial translation of the original ruling issued in Dhivehi, In the event of conflict
between this translation and the Dhivehi version of this ruling, the lqtter shall prevail. Therefore, it is advised thqt both the Dhivehi version of this ruling and this translation be read, concunently.
Maldives Inland Revenue Authority, T-Building, Ameenee Magu,Male, 2}379,Maldives
Tet (960) 3322261, Far (960) 331 6577,E-mail:
[email protected], website: www.mira.gov.mv
