Maldives To Likely Join The Convention On Mutual Administrative Assistance in Tax Matters

On Tuesday, President Ibrahim Mohamed Solih and his Cabinet held a virtual meeting where they deliberated on the paper proposed by the Ministry of Finance regarding joining the ‘Convention on Mutual Administrative Assistance in Tax Matters’ and associated agreements; ‘Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information’ and the ‘Multilateral Competent Authority Agreement on the Exchange of Country-By-Country Reports’. Ultimately, it was decided that the President would seek parliamentary consideration regarding the matter.

This Convention was developed jointly between the Organization for Economic Co-operation and Development (OECD) and the Council of Europe and is the most comprehensive multilateral instrument available for all forms of tax co-operation to tackle tax evasion and avoidance. It facilitates international co-operation for a better operation of national tax laws, at the same time respecting the fundamental rights of taxpayers providing all possible forms of administrative co-operation between states in the assessment and collection of taxes. As part of this co-operation, nations will exchange information, including automatic exchanges, to the recovery of foreign tax claims.

Accordingly, the signatories for the Convention must agree to adopt the multilateral competent authority agreements which follows. The point of this is to create a mechanism for the exchange of information, enforcement of actions relating to tax transparency as a member of the global forum. Most importantly, it will help exclude the Maldives from the European Union (EU) list of non-cooperative jurisdictions for tax purposes.

Subject to these terms, it is expected that Maldives will be signing the convention before the end of April 2021.