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Company Tax in Myanmar

Taxes:Customs Duties,Other Taxes,Administration of Tax Levy & Collection,Urban Real Estate Tax

Date of Promulgation:

Date of Implementatio:2012-04-01

Annex:

Company Tax in Myanmar

 

Company taxes

The extent to which a company has to pay taxes is determined by its tax residence. The tax residence it based on the fact of whether companies are established under Myanmar law or not.

 

The following companies are considered to have their residence in Myanmar:

- Companies established under the Myanmar Companies Act; and

- Companies established under any other existing law of Myanmar, like the Special Company Act and the Foreign Investment Law.

 

For these residential companies income tax is due over the income that is accrued or derived from sources in and outside Myanmar. Non-resident firms are only liable to pay taxes over the income they accrue over sources located in Myanmar.

 

The Tax rates (as of April 2012):

Type of resident 

Tax rate 

Resident Company

25 %

Non-resident branch operating under the FIL

25 %

Non-resident branch not operating under the FIL

35 %

*Note: The fiscal year of Myanmar starts on April 1st and ends at March 31st

 

Capital gains tax 

Non-resident companies are held to pay 40 percent taxes over their capital gains. These taxes are to be paid in the currency in which the capital gains are received.

 

Companies carrying on business in the oil and gas sector in Myanmar are taxed at a progressive rate from 40% to 50% on gains realized from the sale, exchange or transfer by any means, of any capital assets including shares, capital assets, ownership and benefits.

 

Commercial Tax

Unlike most other countries, Myanmar does not hold Value Added Tax (VAT). There is however a system in place, which has quite common characteristics: the Commercial Tax (CT) system. Commercial tax is a tax that is to be paid over goods that are produced and services that are rendered in Myanmar. The Tax also applies to goods that are imported into Myanmar.

 

The rates are based on the type of product. The system refers to the listing in different schedules of the Commercial tax law.

 

Item type

Commercial tax rate

Schedule 1 items

 

Generally these are agricultural items

Not subjected 

Schedule 2-5 items

 

Items such as: 

containers, rice noodles, salted fish, sugar, sanitary products for women, bamboo and rattan products, charcoal stove, tooth-paste, shampoo, gold, platinum, concrete, computers, computers parts and accessories.

5% 

Schedule 6 items

 

These include alcohol, fuel, jade, precious stones, natural gas, teak and luxury items, including cars.

8- 100 % 

Schedule 7 items

 

These include tourism services, motor vehicle maintenance including materials, insurance premium, printing, broking services, landscaping and renovation and building design services, advertising and filming services and legal and auditing services.

5 % 

 

The commercial Tax is due monthly, within 10 days after the month of sale. Requests for returns can be filed per quarter (within a month after the quarter ends) or per year (within three months of the following year).

 

Tax and charges for the import of goods 

Commercial tax is also to be paid on imported goods. This commercial tax is calculated by the sum of the CIF (Cost Insurance and Freight) value, import dues (0.5 percent of the CIF value) and custom duties. Collection is due at the same time as customs duties.

 

Customs duties 

The customs duties paid are based on the assessable value of the good and range from 0 to 40 percent.

 

Property Tax

Foreign companies are prohibited from owning any immovable property, such they are not accounted for property tax either.

 

 

 

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