Major Types of Taxes Levied in Myanmar
The major types of taxes levied in Myanmar include corporate income tax, withholding tax, commercial tax, personal income tax etc. The following is a brief introduction to the said taxes.
- Corporate Income Tax
Companies registered under the laws and regulations of Myanmar are treated as resident companies and subject to corporate income tax on their worldwide income. Branches of foreign companies generally are deemed to be non-resident and subject to corporate income tax on their Myanmar source income.
The current standard corporate income tax rate in Myanmar is 25%. Companies listed o the Yangon Stock exchange are taxed at a reduced rate of 20% on total net taxable profits. Small and medium-sized companies whose income does not exceed MMK10 million for three consecutive years are exempted from corporate income tax.
The tax year in Myanmar is the same as the financial year, which is from 1 October to 30 September. An annual corporate income tax return shall be filed to the tax authority within 3 months (by December 31) from the end of each tax year. Advance payments for corporate income tax shall be made quarterly based on the estimated total income for the year. The advance payment of tax shall be made within 10 days from the end of each quarter.
- Withholding Tax
A summary of the current major withholding tax rates are as follows:
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Type of Income
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Rate Applicable to Resident Payee
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Rate Applicable to Non-resident Payee
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Dividends
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0
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0
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Interests
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0
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15%
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Royalties
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10%
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15%
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- Commercial Tax
Commercial tax is similar to value added tax, which is levied as a turnover tax on goods and services. Generally, commercial tax at a rate of 5% is imposed on goods sold in Myanmar, provision of services, imported goods and exported goods. No commercial tax is imposed if the total amount of sales or receipt from services is less than MMK50 million in a financial year.
Monthly payment of the commercial tax shall be made by the 10th day of the following month. Commercial tax returns shall be filed on a quarterly basis and are due within 30 days from the end of the relevant quarter. An annual tax return shall be filed within 3 months form the end of financial year.
- Personal Income Tax
Myanmar residents are taxed on worldwide income. Foreigners who reside in Myanmar for 183 days or more during an income year are considered tax residents, as well as foreigners working for companies set up under existing Myanmar laws. Non-residents are taxed only on income derived from sources within Myanmar. No tax is payable if total income does not exceed MMK4.8 million in a year.
Progressive rates ranging from 0% to 25% apply to employment income. The employer is responsible for deducting personal income tax due from salary at the time the salary is paid. A statement of the monthly deduction shall be provided to the tax authority within 7 days of the date of deduction. The employer is also required to provide an annual salary statement within 3 months of the end of the tax year.
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