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Tag: tax policy

  • Maldives Delays 17% Tax on Foreign Travel Platforms to April

    Maldives Delays 17% Tax on Foreign Travel Platforms to April

    The Maldives has delayed its planned 17 percent tax on foreign tour operators and digital booking platforms until April 1 next year. The levy was scheduled to take effect on October 1.

    Tourism and Civil Aviation Minister Mohamed Amin announced the deferral during National Tourism Day celebrations. The decision followed pushback from international travel agencies and tour operators. The tax applies to overseas suppliers and digital aggregators that sell resort stays and packages without maintaining a physical office in the country.

    How the Registration System Works

    Under the revised Tourism Goods and Services Tax framework, offshore booking channels and outbound wholesalers must register directly with Maldivian tax authorities. The government expects the broadened net to generate MVR1.6 billion ($104 million) in additional revenue ahead of its Visit Maldives 2027 promotional campaign.

    Foreign distributors warned that adding a 17 percent assessment onto wholesale margins would force immediate retail price hikes across key feeder markets. Travel sellers in Europe and Asia raised concerns. The sudden rollout left no time to reprice contracted resort inventory or update customer billing systems.

    Margin Pressure on Asian Wholesalers

    For online travel platforms and regional wholesalers, the Maldives represents one of the highest average-order-value destinations in Asia-Pacific. Direct registration and local tax remittance mirror digital services taxes introduced across Southeast Asia. Still, applying the full 17 percent rate directly to foreign intermediaries creates immediate friction for packaged holiday sellers.

    India remains one of the largest source markets for Maldivian resorts. That makes Indian travel operators particularly sensitive to the fiscal shift. The Outbound Tour Operators Association of India warned that the additional tax burden and registration compliance would make vacations uncompetitive against alternative island destinations in the region.

    European Operators Seek Legal Clarity

    European industry bodies lobbied Maldivian authorities to scrap or defer the measure, arguing that tour operators would either absorb steep margin losses or pass costs onto travelers already facing higher airfares. Because the underlying legislation had technically taken effect on October 1, distributors faced weeks of legal ambiguity before the minister announced the delay.

    Until there is official confirmation and proper engagement between the Government and industry, the situation remains difficult for members.

    Officials at the U.K. Association of British Travel Agents pointed out that formal administrative circulars must follow public speeches to provide legal certainty for travel sellers holding future bookings.

    Target Date for Final Compliance Rules

    The six-month reprieve gives the Ministry of Tourism and tax authorities time to publish technical registration guidelines before the new April 1 deadline. Travel sellers are watching for detailed rules on how offshore portals must file returns and whether existing wholesale contracts signed for early 2027 will receive transitional exemptions.

  • Average of 382 Minors Registered as Business Heads in South Korea

    Average of 382 Minors Registered as Business Heads in South Korea

    South Korean corporate registries listed an annual average of 382 minors as company heads between 2021 and 2025. The figure comes from National Health Insurance Service records released on Monday.

    Around 21 of those minor representatives drew annual salaries topping 100 million won ($72,200). That group included at least one child aged five or younger.

    Concentration in property and retail entities

    State health insurance data obtained by lawmaker Moon Jin-seok of the Democratic Party of Korea showed 1,909 total minor registrations over the five-year period. The total reflects workplace enrollments where minors were registered as executive representatives. Individual children may appear across multiple years.

    Older children formed the largest cohort. An average of 151 representatives were aged 11 to 15, while 129 were aged 16 to 18. Another 81 were aged six to 10, and 22 were aged five or younger. Among the 21 minors earning more than 100 million won each year, 12 were aged 11 to 15, six were aged 16 to 18, two were aged six to 10, and one was five or younger.

    Corporate filings reveal the listings sit almost entirely in asset-holding vehicles. Of the 100 highest-earning minors examined across the five years, 95 ran businesses in real estate, leasing and commercial services. Four operated in wholesale, retail and consumer repair. One ran a manufacturing business.

    Capital region dominates executive listings

    Seoul accounted for the vast majority of registrations, averaging 237 minor heads per year. Surrounding Gyeonggi Province logged 69. Incheon recorded 23, and the southern port city of Busan registered 19.

    These figures point to family-owned holding structures in metropolitan property markets rather than operating businesses run by young founders. Wealthy families in South Korea routinely establish corporate entities to hold commercial properties, retail shopfronts and land parcels to manage inheritance and gift tax exposure.

    Scrutiny over family income transfers

    Such practices complicate oversight for tax authorities and corporate regulators tracking intergenerational wealth transfers. Appointing non-working minor children as corporate representatives lets family offices distribute operational cash flow, salaries and corporate dividends across multiple tax brackets.

    Regulators across East Asia are checking whether nominal company heads perform actual management functions. For retail landlords and commercial property developers, dealing with entities fronted by underage representatives creates friction during contract execution, lease renewals and legal compliance filings.

    Calls for joint tax investigations

    Moon called on the National Tax Service and the NHIS to launch joint investigations into the practice. The inquiry would determine whether family-run corporations use representative registrations to disguise taxable gifts and shift parent earnings to children.

    Commercial law does not bar minors from holding corporate representative titles. Even so, tax regulators are weighing audits to test whether salaries paid to underage executives match bona fide operational duties.

  • Japan Targets Food Consumption Tax Cut to 1 per Cent Under Reshuffled Cabinet

    Japan Targets Food Consumption Tax Cut to 1 per Cent Under Reshuffled Cabinet

    Japan plans to cut its consumption tax on food from 8 per cent to 1 per cent for two years starting April 2027 under a retained economic team.

    The tax cut anchors Prime Minister Sanae Takaichi’s legislative agenda. She plans to submit the bill to parliament before the end of 2026. Finance Minister Satsuki Katayama will defend the policy and outline how the government will plug the resulting revenue shortfall.

    Tax relief timeline and Cabinet posts

    Takaichi maintained stability across key portfolios while broadening her governing alliance. Foreign Minister Toshimitsu Motegi and Defense Minister Shinjiro Koizumi keep their posts. Chief Cabinet Secretary Minoru Kihara stays on as top government spokesperson. Hiroshi Nakatsuka from the Japan Innovation Party joins as state minister for special missions. The appointment gives the junior coalition partner its first Cabinet seat since the two parties allied in October 2025.

    Keeping Katayama at the Ministry of Finance secures an experienced administrator for the coming tax debates. Officials must draft statutory text and win parliamentary approval in the upcoming session. That schedule gives cash-register vendors and food distributors time to update billing software before the April 2027 start date.

    Implications for grocers and state coffers

    For supermarket chains, convenience store operators, and food manufacturers, the seven-percentage-point cut offers direct margin relief. Grocers have absorbed higher wholesale costs for imported staples and energy for years, passing higher shelf prices to cautious shoppers. A drop to a 1 per cent rate reduces register prices immediately. That discount should support sales volumes across physical stores and food delivery apps.

    Operational challenges center on IT systems. Japanese retailers spent heavily to install dual-rate cash register infrastructure during the October 2019 tax revision. Adjusting cash desks to a temporary 1 per cent bracket will require fresh software updates and staff training across thousands of stores nationwide.

    Parliamentary battles ahead

    Coalition ties date back to October 2025, when the Liberal Democratic Party partnered with the Japan Innovation Party without allocating ministerial seats. Takaichi defeated Koizumi in a party leadership runoff last year. Keeping rivals inside the Cabinet binds potential challengers to her fiscal plans ahead of the September 2027 party presidential election.

    Lawmakers will debate the food tax legislation and its funding mechanisms before the end of December 2026. That vote will set the baseline for consumer prices across Japan’s food retail sector through 2029.