Maldivian President Mohamed Muizzu met Indian leader Narendra Modi in New Delhi on Monday in an effort to deepen ties after months of strained relations over the island nation's growing links with China.
The Indian Ocean country has traditionally been a close partner of New Delhi but relations have been frosty as the Maldives strengthens co-operation with Beijing, which is vying with India for influence in the region.
Mr Muizzu is on a five-day trip at the invitation of Indian counterpart Droupadi Murmu. It is his first state visit since being elected in November last year. In June, he attended Mr Modi’s swearing-in ceremony in the Indian capital as the Prime Minister began his third consecutive term.
On Monday, Mr Muizzu and Mr Modi held talks on bilateral and regional issues, and signed agreements that included enhancing payment systems for Indian tourists in the Maldives. They also agreed on a "comprehensive vision document" outlining a road map for strengthening economic and maritime security co-operation.
“The vision for comprehensive, economic and maritime security partnerships will encompass development co-operation, trade partnerships, digital and financial initiatives, energy projects, health and maritime security co-operation,” Mr Muizzu said after the talks. “A democratic, prosperous and resilient Maldives is important for peace and stability in the Indian Ocean region and India is the important partner in the maritime security domain due to our geographical proximity.”
He highlighted India’s significance in his nation’s socioeconomic and infrastructure development. India has helped the Maldives build a public welfare system and in 2020 committed $500 million to fund the country’s largest infrastructure project, a bridge and causeway linking Male to nearby islands. New Delhi also gave $250 million in financial assistance to the Maldives during the Covid pandemic.
“Our discussions underscored a shared commitment to remain engaged in further missions to bolster Maldives’ resilience and stability,” Mr Muizzu said.
The Maldives has historically been the biggest beneficiary of India’s Neighbourhood First Policy, which focuses on peace and prosperity with neighbouring countries. But the relationship between Male and New Delhi deteriorated after Mr Muizzu, a pro-China politician, won office campaigning on what many perceived as anti-India rhetoric. He chose China for his first overseas trip – although it was not an official state visit – breaking Maldivian tradition that the first port of call be India. He also asked India to withdraw more than half of its military personnel from the island nation in May.
In January, India summoned the Maldivian envoy in New Delhi after a row erupted on social media when Maldivian ministers called Mr Modi "a clown” for diving in a life jacket to promote India's Lakshadweep islands, which are often compared to the white beaches of the Maldives. Supporters of Mr Modi called for a boycott of the Maldives, which receives more than 200,000 Indian tourists every year. More than 8,000 hotel bookings and 2,500 flights were cancelled following the dispute.
Mr Muizzu on Monday urged the return of Indian holidaymakers, saying India is “one of our largest tourism source markets". He added: "We hope to welcome more Indian tourists to the Maldives, allowing for shared growth and understanding between people."
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Quarter-final
UAE v Australia, Friday, 8pm, Hazza bin Zayed Stadium, Al Ain
