The Maldivian Transfer Pricing Regulations are stated in Section 68 (b) (4) and Section 76 (b) of the Maldives Income Tax Act and the Transfer Pricing Regulations. 

The Maldivian Transfer Pricing Regulation is related to the OECD Guidelines.

Arm’s Length Principle

Section 67 of the Income Tax Act specifies the circumstances in which taxpayers must calculate their taxable income on an Arm’s Length basis, regardless of the actual arrangement or transactions.

This principle states that the price of a transaction must be identical in comparable circumstances, regardless of the relationship.

Related Parties 

Related parties are defined when a party:

  • Controls or is controlled by the other party or both are controlled by the same party; or.
  • Is related to the other party; or
  • Is a member in a partnership, and the other party in the same company; or
  • Is a trust, and the other party is a beneficiary thereof; or
  • Is a parent company, and the other party is a permanent establishment in the Maldives.

Transfer Pricing Methods

In order to determine the market value of related party transactions, one of the following five methods may be used:

  • Comparable Uncontrolled Price method.
  • Cost Plus Method.
  • Resale Price Method.
  • Profit Split Method.
  • Transactional Net Margin Method.

If any of the above methods cannot be used, the taxpayer may apply other valuation methods under the Arm’s Length Principle.

Transfer Pricing Documentation

The Transfer Pricing Regulations govern and implement the requirement imposed under Section 68 of the ITA, which means taxpayers prepare and maintain the Transfer Pricing Documentation (i.e., the Master File and the Local Report) concerning controlled related party transactions.

Transfer Pricing documentation enables taxpayers to describe their compliance with the Arm’s Length Principle for their controlled transactions and to provide MIRA (Maldives Inland Revenue Authority) with relevant and reliable information to perform an efficient and consistent Transfer Pricing risk assessment.

The Transfer Pricing documentation (which includes the master file and the local report) should be prepared and filed for the accounting period to which the transaction pertains or the arrangement relates. 

There is no fixed annual deadline for filing the documentation. It must be filed to MIRA upon request within 30 days after request.

The Country-by-Country Report must be filed within 12 months of the end of the reporting fiscal year.

The documentation must be prepared in English or Dhivehi.


There are no specific Transfer Pricing penalties. Conversely, there are penalties contained in Articles 64 and 65 of the Tax Administration Law to be applied for any failure to comply with the Transfer Pricing documentation requirement.

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 Author:       Wolfgang Hartl
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