MIRA issues Tax Ruling on Deductibility of Donations
On 14 January 2024, the Maldives Inland Revenue Authority (MIRA) issued a Tax Ruling 1, addressing MIRA’s interpretation of Section 21 of the Income Tax Act 2 regarding allowable deductions related to donations.
Income Tax Act
Section 21 of the Income Tax Act stipulates that donations made in money made by a taxpayer to a State institution or a charitable organisation approved by the Commissioner General may be deducted in the computation of the taxpayer’s taxable income for the accounting period in which the donation was made.
Historical Practice
In the past, MIRA has allowed deductions for donations made to State institutions or approved charitable organisations, irrespective of whether they were in monetary terms.
Key Changes
However, with the issuance of this Tax Ruling, effective from 1 March 2024, MIRA clarifies that only monetary donations made to State institutions or charitable organisations approved by the Commissioner General are eligible for deduction as donation expense.
Effective Date
This Ruling is effective from 1 March 2024.
