The Maldivian government has tabled an amendment to its Goods and Services Act that would remove the Goods and Services Tax (GST) on inbound tourism products sold by foreign operators that do not maintain a fixed establishment in the archipelago. If passed, the change will apply retroactively from 1 October 2026, and the authorities have pledged to refund any GST collected under the current rules since that date.
The move follows months of pressure from international travel associations, which argued that the tax placed an unfair burden on overseas tour operators and travel agents selling Maldives holidays without a local presence. The amendment also introduces a new anti-avoidance measure designed to counter artificial tax arrangements, a clause that will require careful interpretation by affected businesses.
Industry reaction
Luke Petherbridge, Director of Public Affairs at ABTA – The Travel Association, welcomed the legislative step. “We welcome the legislation brought forward in the Maldivian parliament on 19 October, which, once adopted, will remove suppliers without a physical premises from the scope of the Maldives Goods and Services Act,” he said.
ABTA has been coordinating with global partners, including the World Travel Agents Associations Alliance (WTAAA) and the European Travel Agents' and Tour Operators' Associations (ECTAA), to address the issue. Petherbridge added that ABTA will continue to engage with Maldivian authorities to ensure clear guidance on compliance with the new anti-avoidance mechanisms.
The amendment is expected to ease tax burdens for foreign operators and encourage more inbound tourism activity. For travel professionals, the retroactive refunds could provide a financial boost, but the new anti-avoidance rules will demand careful review of existing booking structures.
As the Maldives remains a top-tier luxury destination, the change is likely to be welcomed by hoteliers and resort groups such as Vakkaru Maldives and Amilla Maldives, who rely on international tour operators to fill rooms. The move also aligns with broader efforts to streamline tourism taxation, as seen in other island economies.
For airlines and travel technology providers, the amendment removes a layer of complexity in pricing and booking systems. Carriers like Maldivian and international airlines serving Male will benefit from clearer tax treatment on package sales.
The retroactive nature of the change means operators that have been charged GST since October 2026 will need to file for refunds, a process that could take time. Industry bodies are urging the Maldives Inland Revenue Authority to issue detailed guidelines on how to claim refunds and how to interpret the anti-avoidance provisions.
While the amendment is still pending parliamentary approval, the signal is clear: the Maldives wants to remain competitive in the global tourism market. As UK tour operators pick year-end destinations, the Maldives' tax clarity could make it a more attractive option for 2026 and beyond.
Travel agents and tour operators should monitor the legislative progress and prepare to adjust their pricing and accounting practices once the amendment is enacted. The new anti-avoidance rule, in particular, will require that any restructuring of sales channels is done for genuine commercial reasons, not merely to avoid tax.
For now, the focus shifts to implementation. Clear communication from Maldivian authorities will be essential to ensure that all stakeholders—from global tour operators to local ground handlers—understand the new rules and can comply without disruption.
