Withholding tax rate on payments made to non-resident contractors in Maldives increased to 10 percent
31 އޯގަސްޓު 2026 | ހޯމަ 18:24The President has ratified an amendment to the Income Tax Act, increasing the withholding tax on payments to non-resident contractors from 5 percent to 10 percent. This adjustment aims to establish a level playing field for Maldivian businesses within the construction industry while streamlining the administrative processes for tax filings by non-resident contractors.
President ratifies second amendment to the Income Tax Act. | President's Office
President Dr. Mohamed Muizzu has on Monday ratified the Second Amendment to the Income Tax Act (Law No. 25/2019), increasing the withholding tax rate on payments made to non-resident contractors to 10 percent. The President signed the bill into law during a special ceremony held at the President's Office on Monday afternoon.
This bill was passed during the 27th sitting of the second session of the year, held on Sunday, August 23, 2026.
The primary objective of this amendment is to establish a fair and competitive environment for local businesses and non-resident contractors bidding on construction projects in the Maldives. To achieve this, the withholding tax rate on total payments made to non-resident contractors will be increased from 5 percent to 10 percent. Furthermore, this revised rate will be designated as the final tax liability for such parties.
The amendment provides a formal definition for non-resident contractors in the Maldives. It is noted that these changes will streamline the administrative processes involved in filing tax returns for non-residents.
The Second Amendment to the Income Tax Act has come into effect following its ratification and subsequent publication in the Government Gazette.
