In the Maldives, the Goods and Services Tax (GST) is a value-added tax levied on the supply of goods and services. As of January 1, 2023, the GST rate for the general sector, which includes restaurants, is 8%. This means that restaurants are required to add an 8% GST to the prices of their offerings.
Calculating GST for Your Restaurant
To accurately calculate GST for your restaurant, follow these steps:
- Determine the GST-Exclusive Price: This is the price of the item or service before GST is added.
- Calculate the GST Amount: Multiply the GST-exclusive price by the GST rate (8%). For example, if an item costs MVR 100 before tax, the GST amount would be MVR 100 × 0.08 = MVR 8.
- Determine the GST-Inclusive Price: Add the GST amount to the GST-exclusive price. Continuing the example, MVR 100 + MVR 8 = MVR 108.
Using Online GST Calculators
Several online tools can assist in calculating GST for your restaurant:
- GST Calculator – Maldivian GST/TGST Calculator: This tool allows you to input the GST-exclusive price and select the applicable tax rate to calculate the GST amount and the GST-inclusive price.
- Maldives GST Calculator | Value Added Tax in Maldives – EasyCalculation: This calculator helps determine the GST amount and the net price after GST for any given amount.
- Maldives GST Calculator – PublicCalculators: This tool provides a straightforward method to calculate the GST amount and the total price inclusive of GST.
Displaying Prices in Your Restaurant
According to the Maldives Inland Revenue Authority (MIRA), businesses must display prices inclusive of GST. The price displayed or quoted on price tags must be the price that the customer pays at the time of payment.
Service Charge Considerations
In addition to GST, many restaurants in the Maldives apply a service charge, typically around 10%. If your restaurant charges a service fee, you may quote prices exclusive of GST, provided that you give sufficient instructions to your customers on how to calculate the final price. For example, you can include a note stating that the service charge and GST will be charged at the applicable rates.
Example Calculation with Service Charge
Suppose your restaurant charges a 10% service fee. Here’s how to calculate the final price for an item with a GST-exclusive price of MVR 100:
- Calculate the Service Charge: MVR 100 × 0.10 = MVR 10.
- Add the Service Charge to the Original Price: MVR 100 + MVR 10 = MVR 110.
- Calculate the GST on the New Total: MVR 110 × 0.08 = MVR 8.80.
- Determine the Final Price: MVR 110 + MVR 8.80 = MVR 118.80.
GST Registration Requirements
If your restaurant’s taxable sales for the past twelve months have exceeded MVR 1 million, or if you expect them to exceed MVR 1 million in the next twelve months, you are required to register for GST. Even if you do not meet these criteria, you may voluntarily register for GST.
Filing GST Returns
Registered businesses must file GST returns and make payments by the 28th day of the month following the end of the taxable period. For example, if you are filing your returns quarterly, your GST return for January, February, and March is due on April 28.
Conclusion
Understanding and accurately calculating GST is essential for the financial health and legal compliance of your restaurant in the Maldives. Utilizing online calculators and adhering to MIRA’s guidelines will help ensure that you charge the correct amount of GST and display prices appropriately to your customers.
