Service Charge in Maldives
Every establishment operating within the tourism sector must collect service charge.
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This requirement extends to a diverse array of facilities including tourist resorts, hotels, guest houses, training resorts, transit hotels, city hotels, tourist vessels, yacht marinas, integrated tourist resorts, private islands, diving schools, diving centers, spas, water sports facilities, excursion activities, cafés/restaurants/canteens, and any other entity providing services on a Tourist Facility, whether directly or through outsourcing.
The service charge, set at a minimum of 10% of the total amount, is applicable to all services rendered within the Tourist Facility. When a Tourist Facility or part thereof is leased for a specified duration, the service charge applies to the entire lease amount. Likewise, the total chartered rate of a chartered tourist vessel is subject to the service charge. All transactions subject to the service charge must clearly indicate the levied amount.
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According to Section 52 of the Employment Act (2/2008) and Section 12 of the Regulation on Service Charge (2021/R41), employers are required to maintain monthly records detailing the total service charge income, number of employees receiving service charge, individual entitlements, and amounts disbursed to each employee. These records must be submitted to both the Labour Relations Authority (LRA) and the Maldives Inland Revenue Authority (MIRA).