European and UK Travel Leaders Warn of Disruptions Over Maldivian Tax Reform
The Eighth Amendment to the Goods and Services Tax (GST) Act was passed by the Maldivian Parliament (People’s Majlis) on 23 August 2026.
Major European travel organisations have escalated concerns over pending changes to the Maldivian Goods and Services Tax (GST) Act, warning that an October deadline could disrupt existing holiday bookings and impose unmanageable burdens on foreign tour operators.
In a formal letter sent on 2 September 2026 to Uza Fathimath Dhiyana, Ambassador of the Maldives to Belgium and the EU, the European Travel Agents’ and Tour Operators’ Associations (ECTAA) urged Maldivian authorities to postpone extending GST obligations to offshore travel businesses. ECTAA Secretary General Eric Drésin warned that implementing the changes from 1 October 2026 leaves critical commercial lead time, as winter holiday packages have already been marketed and sold at fixed prices. The letter highlights that under the EU Package Travel Directive, European operators are legally constrained from passing new taxes levied on their own package supplies onto consumers post-booking, forcing businesses to absorb the additional GST directly into their margins.
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ECTAA also raised concerns over the administrative burden placed on smaller travel agencies, advocating for a registration threshold or simplified compliance regime similar to New Zealand’s NZD 60,000 threshold for non-resident suppliers. Pointing to a lack of practical guidance on how taxable margins should be calculated within multi-layered distribution chains, ECTAA called for an immediate postponement of the deadline, industry consultation, and transitional arrangements for existing bookings.
These European warnings build on initial concerns raised earlier in the summer by British travel representatives. On 27 August 2026, ABTA – The Travel Association addressed a letter to Mohamad Ameen, the Maldivian Minister of Tourism and Aviation, establishing the primary background to the industry dispute. Writing on behalf of UK operators, ABTA Director of Industry Relations Susan Deer noted that proposed amendments to the Goods and Services Tax (GST) Act appeared designed to bring foreign travel agents, tour operators, and offshore suppliers within the scope of local tourism GST, even where businesses have no permanent physical presence in the Maldives. Deer cautioned that introducing extra-territorial tax liabilities calculated on margins or commissions without prior consultation risked creating trade barriers and weakening destination competitiveness. ABTA requested that the Maldivian government pause implementation to clarify registration procedures, calculation methods, and whether the tax applies based on booking or travel dates.
The Eighth Amendment to the Goods and Services Tax (GST) Act was passed by the Maldivian Parliament (People’s Majlis) on 23 August 2026 with 54 votes in favor.
President Muizzu subsequently ratified the bill on 31 August 2026, officially enacting it into law. While general provisions came into force upon publication in the Government Gazette, the provisions extending 17% Tourism GST to foreign tour operators and offshore suppliers take effect on 1 October 2026.
