Tax Compliance Requirements

The current CIT rate is 25% for Myanmar companies, branches registered under the Myanmar Companies Act 1914 and companies operating under permission from the Myanmar Investment Commission (i.e. foreign-owned resident companies with an investment license from the MIC granted under the FIL and MIL 2016). Resident entities, which are defined as companies established under the MCPA, are obliged to declare and pay CIT on their worldwide income. Non- residents, which are defined as entities other than residents, including branches registered under the MCPA, are only obliged to pay CIT on their Myanmar-sourced income. Advance payment of 2% CIT on importation and exportation Companies importing or exporting goods must pay a 2% advanced income tax on the assessed value of the goods for import and export. There are a few exceptions, including the import of materials and equipment during the construction period of projects, and raw materials imported during the first three years of production under an MIC permit. The tax that is collected as an advance payment of CIT can be used as an offset against the annual CIT due at the end of the financial year.

Employers, whether residents or non-residents of Myanmar for tax purposes, are liable to deduct personal income tax (“PIT”) from payments of salaries, wages and other remuneration made to all employees. Employees (both Myanmar nationals and foreigners) are taxed on their income at progressive rates after deducting the prescribed allowances and reliefs; whereas non-residents are taxed only on their Myanmar-sourced income, at the same progressive rates. According to the Union Tax Law (“UTL”) of 2017, anyone whose annual salary income is MMK4.8 million or less is exempt from paying PIT. Tax reliefs and allowances for Myanmar residents

• Basic allowance of 20% of annual salary income, up to a maximum of MMK10,000,000 (approximately US$8,300*)
• MMK500,000 per annum (approximately US$400*) for each child living with the taxpayer who fulfills ALL of the following criteria: 1) is unmarried; 2) is not earning
• MMK1,000,000 (approximately US$830*) for one non-working spouse who is living with the taxpayer
• MMK1,000,000 (approximately US$830*) per parent for dependent parents living with the taxpayer. The term “parent” includes a father- or mother-in-law
• Premiums paid for the life insurance of the taxpayer and taxpayer’s spouse
• Contributions towards savings funds approved by the Internal Revenue Department (“IRD”)
• Social security contributions made by employees to the Social Security Board (2% of annual salary, capped at MMK72,000 (approximatively US$60*)

The tax rates for resident and non-resident employees are now at the same progressive rates, although for resident taxpayers, the PIT rates are applied on their worldwide income after deduction of the reliefs and allowances above, while for non-residents, the PIT rates are applied on their Myanmar-sourced salary income without any deduction.
The following table shows the PIT rates on annual salary income. Approximate US$ amounts are shown in brackets based on an exchange rate of US$1 = MMK1,200.
Undisclosed source of income will be subject to income tax at 30% for both citizens and foreigners before deduction of prescribed tax reliefs and allowances mentioned under the PIT section.

No.	Income (MMK)	Income Tax Rate
a.	1 - 30,000,000	15%
b.	30,000,001 -   100,000,000	20%
c.	100,000,001 and above	30%

Commercial tax (“CT”) is levied on four types of activities:

• Local production and sale of goods
• Importation of goods
• Trading
• Provision of services

Registration

Apart from importation, any person (including non-residents) who is performing the abovementioned activities that are subject to CT is required to register for CT one month in advance of the commencement of business. CT on importation will be collected by the Customs Department together with customs duty.
Summary of the applicable CT rates:

Myanmar introduced a Specific Goods Tax (“SGT”), effective from 1 April 2016, for the financial year 2016-2017.
The tax base is the sale or service proceeds including Specific Goods Tax (“SGT”) from trading, rendering services, local production or sales of goods.
For imports, the tax base is the CIF (cost, insurance and freight) value, customs duty and SGT (if applicable).
SGT is imposed on:

• The import of specific goods into Myanmar
• The local production of specific goods
• The export of specific goods overseas

Therefore, importers, producers and exporters of specific goods are subject to paying SGT. There are 17 types of specific goods.
The 2017 UTL introduced SGT significant rate changes for importing and manufacturing of such goods as cigarettes (an extra MMK 1 per cigarette), cheroots, cigars, pipe tobacco, and betel (an increase of 20% to an 80% tax rate); liquor and wine (but not beer, which is still at a 60% rate); wood logs (a reduction from a 20% rate to 5%); and uncut gems.
In addition, the number of types of goods subject to the tax was reduced from 20% to 17%.
For exports, the tax rate is reduced from 20% to 10% for wood logs and from 20% to 15% for uncut jade and 20% to 10% for other gemstones. (Union Tax Law 2017)

Specific Goods Tax Exemptions

There are a number of SGT exemptions, including an exemption for the export of specific goods temporarily imported for the purpose of re-exporting.

Capital gains tax (“CGT”) is applicable to both resident and non- resident taxpayers deriving a profit from the sale, exchange, or transfer of capital assets in Myanmar.
If the total value of the capital asset; which was sold, exchanged or transferred, does not exceed MMK 10 million, CGT will not be applicable.
The CGT rate for all taxpayers (with the exception of those deriving a gain from an oil and gas asset or a company holding an oil and gas asset) is 10%, and is imposed in either MMK or a foreign currency.
CGT for the oil and gas sector must be paid in the same currency in which the gain was received. The following rates apply:

	Capital gain	Tax rate
1	Up to MMK100 billion	40%
2	From over MMK100 billion to MMK150 billion	45%
3	Over MMK150 billion	50%