Hotel, Tourism & Guesthouse
An Overview of the Maldivian Tourism Industry
The Maldivian tourism industry is a vital pillar of the country's economy, contributing significantly to its GDP. With its pristine white sandy beaches, crystal-clear turquoise waters, and abundant marine life, the Maldives has become a globally renowned tropical paradise and a sought-after tourist destination.
The Maldives is an archipelago consisting of 26 atolls, each composed of numerous islands. These islands offer a range of luxurious resorts, boutique hotels, and guesthouses that cater to different budgets and preferences. The tourism industry in the Maldives is primarily focused on luxury travel, attracting honeymooners, beach lovers, and diving enthusiasts from around the world.
Key considerations for businesses operating in the industry on accounting and compliance perspectives.
Audit
Businesses operating in tourism industry has a requirement to submit audited financial statements for tax purposes.
Tax
Taxation Framework: The Maldivian tax system for the tourism industry involves various taxes, such as Goods and Services Tax (GST), Bed Tax, and Tourism Goods and Services Tax (T-GST). Complying with these tax regulations, understanding applicable exemptions, and managing tax liabilities can be intricate for businesses operating in the sector.
Transfer Pricing: For resort chains with international operations, ensuring compliance with transfer pricing regulations when transactions occur between affiliated entities can be complex. Proper documentation and adherence to arm's length principles are important to avoid tax-related disputes.
Tax Incentives and Exemptions: The government may offer tax incentives and exemptions to attract investments and promote sustainable practices in the tourism sector. Understanding and utilizing these incentives effectively require careful planning and collaboration with tax advisors.
Advisory
Environmental Sustainability: The Maldives' fragile ecosystem necessitates robust environmental sustainability practices in the tourism industry. Resorts need to manage waste, reduce carbon emissions, conserve water, and protect coral reefs. Implementing green initiatives while maintaining profitability can be a challenge.
Social Impact: Balancing economic growth with the social impact of tourism is crucial. Ensuring fair employment practices, supporting local communities, preserving cultural heritage, and promoting inclusive tourism are essential for sustainable development.
Governance and Transparency: Good corporate governance practices, including transparent reporting, risk management, and ethical business conduct, play a vital role in the Maldivian tourism industry. Maintaining high standards of governance helps build trust among stakeholders and attracts responsible investment.
How can we help?
For hotel groups with international operations, our extensive network of 250 Crowe Global firms worldwide can greatly facilitate group audits. This global presence allows us to efficiently coordinate and manage audits across multiple jurisdictions, ensuring compliance and consistency throughout the group. By leveraging the expertise and resources available within our network, we offer seamless audit services to hotel groups operating internationally.
At Crowe, we understand the significance of tax planning and compliance for businesses in the tourism sector. We have the knowledge and experience to guide hotel companies in navigating the complex tax environment in the Maldives and assist them in effectively managing their tax obligations.
Our large team of tax professionals is well-versed in tax compliance requirements specific to the Maldives. We provide services such as the preparation of tax computations, ensuring adherence to all tax rules, and maximizing the claims of operating expenses. We also offer guidance on matters like withholding taxes, transfer pricing and liaising with the tax authorities.
We offer specialized consulting services including risk advisory and valuation, tailored to drive your corporate growth and improve overall organizational well-being.
Our expertise in the hotel, travel, and leisure market is further strengthened through our affiliation with Horwath HTL, recognized as the leading advisory experts in the hotel, travel, and leisure industry. This partnership allows us to provide an extensive breadth of knowledge and experience in the hotel industry.