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Initial Interview - Questionnaire

TIN
Taxpayer name

GENERAL
1. Do you have anything to clarify or any disclosures to make before we start
the interview?

Taxpayer background
1. Please outline the current ownership structure of the taxpayer including
details of Parent, associate and subsidiary entities. (If possible obtain a
structure chart).
2. What significant changes have arisen in the last 12 months, or are planned in
the next 12 months, in relation to the groups business? What consideration,
if any, has been given to how these changes might impact on the groups tax
systems?
3. What is your accounting period?
4. Do you do any internal auditing? If so,
(a) How often
(b) What are the procedures
(c) Who is your internal auditor?

Accounting System
1.
(a)
(b)
(c)
(d)
(e)

Which Software is used ;


Accounting purpose?
Point of Sale?
Reservations and front office?
Out sourced facilities?
Any other; please specify?

2.

Is it integrated?

3.

What are the control measures?

4.

What are the system limitations?

5. What significant changes has arisen in the last 12 months, or are planned in
the next 12 months in relation to accounting system , and what are the
expected impacts of these changes on the tax system?

Business Profit Tax (BPT)


1. Who prepares the BPT return? If prepared by an agent are the returns
properly examined before signing?
2. What were the key issues which arose in respect of the 2011 BPT return
preparation?
3. What significant changes occurred, if any, in the 2011 income year in relation
to the
businesss accounting and tax policies and practices?
4. What are the most significant highlights (events and/or transactions) for the
2011 BPT
year? What is expected over the next 12 months?

Goods & Services Tax (GST) / Revenue for BPT

SEE
FINANCIALS
1. How Many rooms are located in the resort? Have 45 Villas
(94 beds), 4
Bubble Villas (Does not keep the guests here for overnights) Room type:
Villa Suite, Residential, Cruiser, Private residence
2. Do you monthly revenue reconciliation?
3. Procedure in recording revenue in system? Reconciliation? night Auditing

Outsourced Facilities
4. List of all the outsourced facilities and their profit sharing basis? Diving
centre, and Jewelry shop
5. How are the sales of the outsourced facilities recorded?
6. Do they make a tax invoices?
7. Do you provide any supplies to them? If so, how do they settle the bills?

Service Charge Policy


1. What is the service charge policy?
2. Do you keep a record of service charge distribution to staffs?
3. So, are you charging GST from service charge? Why?

1. Who is the lease holder?


a. How often do they visit?
b. Who comes along with them?

c. Ho w do you treat their accommodation and consumption for tax


purpose?
2. Does the management have any other resorts? How many? HPL Group
3. How many staffs are there in the resort?
a. How many in finance / accounting section?
b. How many Maldivians?
c. Is there a staff shop in the resort?
i. Is it under resort management?
ii. How do you record the sales proceeds of the staff shop?
iii. Do you charge GST?
4. Do you provide supplies on complimentary basis to staffs? How is the
arrangement?
5. What are the incomes generated by the resort apart from supplies to tourists?
6. How do you recognize revenue for accounting purpose and for GST purpose?
7. Who is in charge of preparing GST returns?
8. Explain how you prepare the GST return?
9. Do you prepare special work sheets (e.g. Excel) for GST Return preparation? In
what format are they
10.Does the software used in the entity cater for GGST/TGST purposes?

Customer Base

1. What
a.
b.
c.
d.
e.

is your customer base?


Tour Operators?
FITs?
Local Travel Agencies?
Transfers within the group of resorts?
Any other; please specify?

2. Who is your main tour operator?


a. Local?
b. Foreign?
3. When do you have the highest and the lowest occupancy? Reasons?
4. What are the general occupancy rates for peak and off peak season?
5. On average how many days do the guests stay?

6. On average how much do they spend per day/per trip?

Invoice Preparation

1. How are invoices prepared?


a. Manual: Does it contain preprinted serial number?
b. System: Can you amend any detail in the invoice after you raise an
invoice?
2. When
a.
b.
c.
d.

do you raise the tax invoices


Tour Operators? On arrival or departure?
FITs?
Travel Agencies?
Outsourced Facilities?

3. How do you, account for extra sales?


a. Tour Operators?
b. FITs?
4. What is the credit period offered?
5. Do you include bank charges in pro forma invoice or tax invoice? If so, is
GST charged?
6. What
a.
b.
c.
d.

are the payment arrangements for:


Tour Operators?
FITs?
Travel Agencies?
Outsource Facilities?

7. Do you charge a commission when customer makes payment using credit


cards? If so, is GST charged?
8. What would be the cause for a change in pro-forma invoice total and tax
invoice total? And for which invoice do you receive payments?
9. Do you receive bulk deposits from your clients without specific bookings?
a. What is your treatment on such items before 2 nd October?
b. Treatment for such items after 2nd October?
c. How do you set off these amounts to a clients payable amount to
resort?
10.Do you receive advance payments for specific bookings?
a. What is your treatment on such transactions?

b. How do you adjust the advance payments when you make the
invoices?
11.Do you receive payments in currencies other than USD?
a. What is the exchange rate you use?
12.Do you reconcile your receipts with bank statement?
a. How often?
13.How many bank accounts do you have? What is the most active one?

Cost of Sales
(a) Procedure for record of cost of sales? Purchase order, invoice, Good Receiving
note, good requisition
(b) How is inventory maintained?
(c) Do you carry Monthly stock counting?
(d) How is inventory Valued
(e) Which System is used for inventory recording?
(f) What are the source documents Maintained?
(g) You do create a provision for obsolete inventories? Policy

Staff Expenses
Who prepares payroll? Procedure from preparation to approval
Policy related to staff? Eg: use of business goods (stock, bar, other activities)
What are the allowances you give apart from monthly allowance? Any provision created
or not.

Loan Agreement.

You have entered to a loan agreement with Aeral Bank AG right? $20M

Purpose of loan?
Was there any amendment to the agreement due to the termination of agreement
between Six Senses Mauritius (BVI)
Any other loan apart from this?

Island lease Payment


-

Was there a change in lease holder in the past years?


You have obtained the sub lease right of Lankan fushi Island? Right?

HPL group
-

When did HPL group started managing the resort? Was it after the
termination of agreement between Six Senses?
Is there an agreement?
How much is paid as management fee?

ASSETS:
-

any major changes to the business property? Repair?


How is the purchasing procedure in buying assets? Approval?

Tax Management & Corporate Governance


1. Do you have an In-house accounting team?
(h) Please describe their structure and responsibilities
(i) Who is charge of the team and what are the reporting lines?
(j)

Is the team responsible for tax compliance?

(k) What, if any, compliance and day to day functions are performed by external
contractors and advisors. Who are they and what day to day functions did they
perform during the period under review?
(l)

Ultimately who is responsible for tax compliance within the company?

2. Does the company have a documented tax risk management policy? If yes,
briefly outline what the policy is.
3. What processes are in place to ensure tax risk management controls are
operating effectively for the various taxes?
4. What manuals and guidance notes are available which set out identified tax
risks and what controls are in place to minimize your tax exposure?

Impact of changes in Accounting Standards


2. What tax issues, if any, have you encountered with the implementation of
IFRS?

Financial Statements & related tax matters

Funding
1. If the group is foreign owned how is capital raised from the parent or associates?
2. Is any funding by way of convertible notes or other hybrid instruments? (If so what
is the face value of these instruments and when were they issued?)
-

Mergers & Acquisition

3. What merger, acquisition and/or restructuring activity has occurred over the
last two years? Are you anticipating any activity in these areas over the
next 12 months?
4. In respect of these please advise the type of activities any new companies
formed or companies that were formerly dormant will undertake.
-

Foreign investment & transfer pricing

5. What was the extent and nature of the groups foreign operations and cross
border activities in the 2011 income year? How, if at all, do you expect this
to change in the future?
6. Have there been any material structural changes in the last two years which
have resulted in a reduction of business functions, assets held and risks
borne by the Maldivian operations?
7. Has the Maldivian group been involved in any material transactions (over $US
250,000) with related entities in low tax jurisdictions? If yes, please outline
the type of transactions, the parties and jurisdictions involved.
8. Does the group as a whole have any transfer pricing issues under audit by, or
in dispute with, other tax authorities?

Cross border leases

9. Is the taxpayer a party to any lease of Maldivian or overseas based assets


that have a foreign counterparty (whether a related or unrelated party)?
Please provide details of the asset, location and counterparty.
-

Dual tax resident and hybrid entities

10.Are there any group entities dual tax residents, i.e. being tax resident in
Maldives and another country? If yes, who are the dual tax resident
entities, in which other country are they also a tax resident, and what
functions do they undertake?
11.Does the group have any hybrid entities i.e. ones that have a different
classification for the purposes of the groups tax calculation in another
jurisdiction? For example, limited partnerships, unit trusts, unlimited liability
companies.
12.Is any group entity a partner of a special/limited partnership with an
overseas entity?
-

Intangibles (excluding Goodwill)

13.Has the group been involved in any significant transaction (over $US
500,000) involving intangible or intellectual property in the 2011 income
year? If yes, please provide details? Examples of this are the sale or
purchase or licensing of brands, patents, know-how, trademarks, software,
license or programming rights and copyright. This question includes intra
group transactions. Please provide details.
14.Does the taxpayer make a payment (intra group or third party) over $US
50,000 per annum for the use of intangible or intellectual property? If yes,
please advise which entity and the reasons for the payment.
15.Does the group own any significant (over $US 500,000 in value) income
producing intangible or intellectual property that is used outside the
Maldives. Please provide details - this is to include both third party and
intra group transactions.
-

Transaction Specific

16.Please provide details of transactions involving ANY of the following


features:

(a) Any transaction that has resulted in a net tax loss or capital gain or
foreign tax credit in excess of $US 50,000 to the taxpayer in the 2011 tax
year.
(b) Any transaction where the actual or expected treatment of the
transaction for income tax purposes in any tax year differs or is expected
to differ by more than $US 50,000 from the treatment of the transaction
for purposes of reported income in the group's financial statements for
the same period.
(c) Any transaction in which some or all of the fees payable by the group
(either for advice or for implementation of the transaction) are refundable
or contingent on whether part or all of the tax consequences of the
transaction are sustained.
(d) Any transaction in respect of which a promoter or professional firm has
received or expects to receive fees or other consideration with an
aggregate value in excess of $US 50,000 (not being interest).
(e) How are business profits returned to stakeholders? Does the taxpayer
have an expected or required rate of return? A dividend policy? (Details)
(b) Please provide details of all special purpose entities or trusts established
during the year by the group, including brief details of underlying
transactions utilizing such entities or trusts.

Purchases
1. How do you make your purchases? Locally or import? (Type / Proportion /
Where)
2. How often is stock being replaced? How much do you buy at a turn?
Maximum, Minimum and Average?
3. Have you claimed Input tax for all your taxable local purchases?
4. How much do you add as mark-up? (Import and local if available)
5. What is the fright charge?
6. How do you fund the stocks being bought?

Withholding Tax
1.
2.

Who provides you the software package? Do you pay a yearly fee?
Do you have any foreign entertainers?
(a) Even during festival seasons?

(b) If yes, are they your staffs or just visiting?


3.

How do you market your brand?


(a) Do you have contracts with specialist advertising agencies?

4.

To whom do you pay management fee?


(a) What is the procedure?

5.
Do you make any contra entries to set off your payables to
receivables?
6.
What is the exchange rate you use for the computation of withholding
tax assessment?
7.
Do you have the details of all foreign payments you made since 18 th
July 2011?
(a) Is it in soft copies or hard copies?
8.

Do you have details of transactions along with the bank statements?

9.

How do you provide online booking services?