The Maldives is set to extend its 17% tourism goods and services tax to overseas sellers from October 1, prompting worry among Indian travel operators who fear increased costs and disrupted contracts amid new compliance requirements.
The Maldives is moving ahead with plans to extend its 17% tourism goods and services tax to overseas sellers from 1 October, prompting concern from Indian travel operators who say the change could raise holiday costs and disrupt existing contracts. According to guidance released by the Maldives Inland Revenue Authority, the new rules will pull foreign tour operators, travel agents, online travel agencies, bed banks and booking platforms into the country’s tourism tax net, even if they have no permanent base in the Maldives. The tax authority has also said there will be no turnover threshold for registration.
The Outbound Tour Operators Association of India has asked Maldivian authorities to rethink the measure, arguing that it could add another layer of cost to a destination already subject to a range of tourism charges. Travel trade reporting on the industry’s reaction says operators are worried the change will force them to revisit pricing structures, supplier contracts and booking processes at short notice, especially for packages sold through overseas intermediaries.
The legal basis for the change is the Eighth Amendment to the Maldives’ goods and services tax law, which was ratified after passing through parliament in August. Separate legal and tax briefings say the reform is meant to ensure that tourism services consumed in the Maldives are taxed even when the seller is based abroad. For overseas resellers, the authority has said the tax will be calculated on the tax-exclusive margin between the customer’s price and the amount paid to a GST-registered supplier, divided by 1.17.
Industry advisers say the practical effect will be significant because foreign sellers will need to register, file returns online and keep records under Maldives tax rules. That means accommodation sellers, transport providers, destination management companies and booking platforms all face compliance obligations from the start of October, regardless of scale. UK trade body ABTA has also reportedly pressed for a six-month delay, underlining that the issue is drawing concern well beyond India.
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