The main changes in the utl 2019 regarding myanmars commercial tax regime are that 1 commercial tax on services procured using donations made to the union are exempted, and 2 commercial tax paid by the taxpayer when purchasing gold and jewellery. Myanmar sales tax rate commercial tax 20142020 data. The rights for myanmar to impose capital gains tax on nonresident investors are limited in several of myanmars income tax treaties. Amending the commercial tax law 2015 legal documents. The purpose of this law is to offer tax incentives and exemptions to attract the larger foreign investments. Stamp duty the myanmar stamp act 1899 the court fees act 1870. The union tax laws 201420152016 provisions related to tax policy such as tax rates. Commercial tax law 1990 legal documents myanmar national. Myanmar union tax law 2019 amended to provide conditional. Transactions between businesses should be vat neutral. While generally, developing countries rely heavily on regressive taxes 10, myanmar performs better than other low and middleincome countries lmics in this regard. Union taxation law 2019, effective from 1 october 2019. Myanmar law 2012 page 31 grant of two licenses for the operation of private telecommunications networks in june 20 page 9.
Resident entities, which are defined as companies established under the mcpa, are obliged to declare and pay cit on their worldwide income. Department of myanmar ird released draft new income tax law for comment. The taxable capital gain is calculated based on the difference between the sales proceeds and the cost of the asset, less the accumulated tax depreciation allowed under the myanmar income tax law. Regarding domestic products, for sales up to kyats 240 000 yearly sales made by the.
How can kpmg help kpmg can assist in managing your tax compliance needs whilst operating in myanmar including corporate tax, personal income tax, commercial tax and withholding tax filings. Rule of law and commercial litigation in myanmar, the. The administration of justice myanmar courts base the administration of justice upon the following principles. The tax is imposed on anyone engaged in manufacturing, distribution, importation of goods, trading or the provision of. Parliament is set to approve the 2018 union tax law today. Commercial tax law the second of these revenue laws is the law amending the commercial tax law. Home ebook myanmar income tax law in 1974 and myanmar commercial trade law in 1990 myanmar income tax law in 1974 and myanmar commercial trade law in 1990 author. Republic of the union of myanmar quarterly commercial tax return. Announcement of internal revenue department commercial tax. The bill will include regulations on tax amnesty provisions under which tax payers who have failed to pay tax in the past will be given the opportunity to pay up under lower rates, said pyidaungsu hluttaw speaker mahn win khaing than. Myanmar union tax law 2018 highlights of this note no change in financial year capitalgains tax for the oil and gas sector specific goodstax changesto the commercialtax exemption list listed companies summary the union parliament the pyidaungsu hluttaw enacted the union tax law 2018 utl 2018 on 30 march 2018. On 28 march 2014, the union of myanmar revenue law of 2014.
Law, commercial tax law and specific goods tax law. Oct 30, 2015 home ebook myanmar income tax law in 1974 and myanmar commercial trade law in 1990 myanmar income tax law in 1974 and myanmar commercial trade law in 1990 author. For specific goods listed in the specific goods tax law, commercial tax will be. The rates of commercial tax are set out in various schedules to the commercial tax law introduced on 31 march 1990. This law shall extend to the whole of the republic of the union of myanmar and shall also apply. Companies registered under the mil are treated as resident companies. Apr 27, 2018 parliament is set to approve the 2018 union tax law today. Tax systems in myanmar international monetary fund. Special goods tax law amended back the myanmar government has recently introduced significant amendments to the law on special goods tax sgt, including the tax base for computing sgt, and reporting requirements for sgtregistered exporters and manufacturers of locallyproduced regulated and nonessential goods. The commercial tax law in myanmar is a revenueraising measure similar, but not identical, to the wellknown valueadded tax vat. Myanmar highlights 2019 rate a 25% tax rate applies to companies incorporated under the myanmar companies law and foreign organizations that have obtained special permission to be engaged in statesponsored projects or undertakings. Very simply put, commercial tax is levied on a companys revenue, whereas income tax is levied on what is left from the revenue.
In this newsletter, we have outlined the significant changes that may impact most of the investors doing business in myanmar. In order to pay online, the company needs to have an account with a member bank of the myanmar payment unions. This law shall extend to the whole of the republic of the union of myanmar and shall also apply to all the citizens of the republic of the union of myanmar residing outside the republic of the union of myanmar. It is hoped that the bill when passed into law would provide much needed clarity to the tax filing and finalisation process. In the longterm, the myanmar sales tax rate commercial tax is projected to trend around 5. Foreigners working for union of myanmar foreign investment law mfil or myanmar investment law mil companies may be taxed at the same tax rates as a tax resident, regardless of their period of stay in myanmar, under the tax incentives that may be granted to. However, please note that cit rate for companies listed on the yangon stock exchange is 20%. Visit this page for an executive summary of myanmars tax structure and rates, by salestaxhandbook.
The administration of justice myanmar courts base the administration of justice upon the. The gemstone tax shall be calculated on the following basis. The myanmar stamp act1899 the court fees act1870 4. This interpretation statement tells you how ird interprets the provisions of the commercial tax law concerning the imposition of commercial tax on total revenue. While this tax is relatively small, making up only 0. Commercial tax law under section 4 of the commercial tax law state law and order restoration council no. Union taxation law 2017 has been enacted introducing changes to the special goods tax, commercial tax and income tax regime that are effective from 1 april 2017. Union taxation law 2018 and its implications for business the myanmar government enacted the union taxation law 2018 and it came into force on 1 april 2018. The rates of commercial tax are set out in various schedules.
Myanmar union tax law 2019 amended to provide conditional tax. Yangon telenor myanmar stands as the largest taxpayer among all foreign companies operating in myanmar, contributing to both the commercial tax and corporate income tax sectors for 2018 tax assessment year, according to an announcement from. Myanmar gemstone law 2019 with the tax rates as provided in the table below. A person who builds and sells the building shall be liable to follow the duty and entitled to the rights contained in the commercial tax law and commercial tax regulations.
The republic of the union of myanmar ministry of planning. Working with myanmars commercial tax the myanmar times. An association of persons other than a company is resident in myanmar where the control, management and decisionmaking for its affairs are situated and exercised wholly in myanmar. Central bank of myanmar cbm may have to follow the same guidance as stateowned enterprises through a notification.
Trade is considered to be a service under schedule 7 to the commercial tax law, but a trading company can, as a reseller, offset input tax on. Income tax law chapter i title, application and definitions 1. Income tax is levied on gains from the sale, exchange or transfer of capital assets e. Recovery of tax from persons leaving the union of burma for good. Tax reforms in myanmar international monetary fund. Commercial tax law was enacted in 1990 and has effect in stateowned. Under myanmar income tax law, dividends received are not subject to income tax. Under the myanmar income tax law, expenditure incurred for the purpose of earning income and depreciation allowance prescribed by the regulations shall be deducted from taxable income. Changes to income tax under section 19 e of the union taxation law 2018, the income tax rates levied on partnerships shall be as below, on net income after deducting allowances under section 6 of the income tax law. Changes to the commercial tax law the list of goods and services that are exempted from commercial tax remains the same except for the following key changes. Myanmar union taxation law 2018 and its implications for business. Under myanmar income tax law, interest are subject to tax.
Amending the commercial tax law 2015 myanmar national trade. We are hopeful that the amnesty will mobilise private funds and result in more capital injection into myanmars economic system. The utl 2019 also makes the following amendments to the union tax law 2018. Under the myanmar income tax law, expenditure incurred for the purpose of earning income and depreciation allowance prescribed by the regulations shall be. Inserted by section 4of the law amending the commercial tax law, 1991.
Unlike pit, which is a progressive tax, commercial tax is regressive, which means that relative to income, poorer households experience a larger tax burden. The commercial tax law the state law and order restoration council law no. Myanmar tax law the myanmar income tax law, 1974 the commercial tax law,1990 the union of myanmar foreign investment law 2012 and latest notifications issued by ministry of finance and revenue dated june 2012 applicable laws to individuals, companies and jointventures. Myanmar continues to push tax reforms with the passage of five new tax laws. Myanmar has a national commercial tax ct of 5% as of 2020, administered by the companies circle tax office. Republic of the union of myanmar section 389, every citizen has the duty to pay taxes to be. Property tax is administered in urban areas by development affairs organizations daos 12 based on the estimated value of both residential and commercial properties. Capital gains there is no separate capital gains tax law. The commercial tax law the state law and order restoration. Myanmar operates a onetier corporate tax system, under which dividends received from a company or other association of persons are exempt from income tax in the hands of shareholders.
Page 3 corporate income tax rates of tax the current corporate income tax cit rate is 25% for myanmar companies, branches registered under the myanmar companies law mcl 2017, and companies operating under permission from the myanmar investment commission. Submission of false documents is a violation of section 177, myanmar. This alert summarizes the changes which will impact businesses in myanmar. Incometax law chapter i title, application and definitions 1. Capital gains tax is levied on gains from the sale, exchange or. Itl income tax law meb myanmar economic bank mfil myanmar foreign investment law mftb myanmar foreign trade bank mic myanmar investment commission mmk myanmar kyat ofac office of foreign assets control scb state commercial bank see stateowned economic enterprise sez special economic zone spdc state peace and development council. A commercial tax commercial tax is imposed on a wide range of goods, imported into or produced in myanmar, trading sales, and services.
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