Myanmar Tax Structure

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  • Hello dear, My name is mariam nasrin, I know that this email will meet you in a good health and also surprisingly but God has his own way of bringing people together. Nice to Meet you I would appreciate if you can reply me back( mariamnasrin2@gmail.com ) So that i can explain you more about me. thank Yours mariam.
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  • Nice presentation!
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  • Hi, are the slides pertaining to Personal Income Tax (PIT) still applicable for 2013?
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  • Nice presentation, very clear. Thank you very much for that.
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  • A very nice presentation. We are looking at the tax requirements for some employees in Myanmar. Does anyone have any suggestions on how to make sure we are covering all the issues?
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Myanmar Tax Structure

  1. 1. Myanmar Tax StructureTaxation Issues & Regulatory Requirements19 June 2012 Soe Win Myanmar Vigour
  2. 2. Myanmar Tax Structure Applicable laws to individuals, companies and joint ventures:• The Myanmar Income Tax Law• The Commercial Tax Law• The Union of Myanmar Foreign Investment Law (MFIL) and• Latest Notifications issued by Ministry of Finance Revenue dated 15 March 2012.
  3. 3. Application of the LawThe Income Tax Law applies to the following types of taxpayers:-i. State Economic Enterpriseii. Co-operative societiesiii. Foreigners and foreign organisations engaged under special permission in state-sponsored enterprisesiv. Foreigners engaged by the private sectorv. Foreign and local companiesvi. Myanmar Nationalsvii. Partnerships or joint-ventures
  4. 4. Resident ForeignersIndividual- stayed not less than 183 days during income yearCompany- formed under the Myanmar Companies ActAn association- formed wholly or partly with foreigners where management affairs situated and exercised in Myanmar.Non-Resident Foreigners- A foreigner or organisation which is not a resident in Myanmar
  5. 5. Chargeable IncomeHeads of Incomei. Salariesii. Professioniii. Businessiv. Property (letting out)v. Capital gainsvi. Income from other sourcesvii. Income from undisclosed sources
  6. 6. MFIL Company Income Tax at 25% on income accrued in Myanmar Tax Incentives under MFIL. Capital Gains Tax at 10% on gains (Except Oil and Gas Co.) Withholding Tax for payments made to third party:- Res: Non-Res:Interest Nil 15%Royalties, trademark, patent 15% 20%Payment to contractor 2% 3.5%Payments for procurement within country 2% 3.5%
  7. 7. Resident Company Income Tax at 25% Capital Gains Tax at 10% on gains in excess of Kyat 5 mil (Except Oil and Gas Co.) Withholding Tax for payments made to third party:- Res: Non-Res:Interest Nil 15%Royalties, trademark, patent 15% 20%Payment to contractor 2% 3.5%Payments for procurement within country 2% 3.5%
  8. 8. Non-Resident Company Income Tax at 35% Capital Gains Tax at 40% on gains Withholding Tax for payments made to third party:- Res: Non-Res:Interest Nil 15%Royalties, trademark, patent 15% 20%Payment to contractor 2% 3.5%Payments for procurement within country 2% 3.5%
  9. 9. Foreign BranchesCalculation of taxable income, at the option of the InternalRevenue Department (IRD):Method 1: 35%Method 2: on a proportion of worldwide profit adjusted in accordance with the Myanmar Tax LawMethod 3: on any basis deemed reasonable by IRD
  10. 10. C.M.P CompaniesIncome tax Income tax 25 % on income As per notification 148/2012, income tax shall be in Kyat.Business RepresentativeIncome tax Being a cost center, gathering statistics and acting as liaison office, tax exposure is not likely.
  11. 11. Income Tax on CompaniesType of Taxpayer or Income Tax Ratesi. Companies incorporated in Myanmar under Myanmar Companies Act 25%ii. Companies operating under MFIL 25%iii. Foreign organisations engaged under special permission in State- 25% sponsored projects, enterprise or any undertaking 111/12iv. Non-resident foreign organisations such as a branch of a foreign company 35%v. Capital gains - Resident companies 10 % - Non-resident companies 40 %
  12. 12. Income tax on Oil & Gas CompanyFor Oil and Gas Company, sale, transfer or exchange inforeign currency- Up to 100 Million @ 40% 100 to 150 Million @ 45% Above 150 Million @ 50%
  13. 13. Income tax on IndividualsTypes of Taxpayer or Income Tax RatesSalaries i. Foreigners engaged under special permission in a State- 20 % sponsored project, enterprise, receiving salary in Kyat ii. Foreigners working for MFIL companies Progressive rates iii. Resident Foreigners Progressive rates iv. Nationals earning foreign exchange in Myanmar Progressive rates v. Non-resident Foreigners 35%Other income: 35 % - ForeignersCapital gains tax 10 % - Resident 40 % - Non-resident
  14. 14. Progressive Income Tax Rates on SalaryNo. Chargeable income per annum (Kyats) Tax rate Difference Progressive Accumulated in % payable tax tax (A) (B) (C= B-A) 1 1 500,000 1% 500,000 5,000 5,000 2 500,001 1,000,000 2% 500,000 10,000 15,000 3 1,000,001 1,500,000 3% 500,000 15,000 3,0000 4 1,500,001 2,000,000 4% 500,000 20,000 50,000 5 2,000,001 3,000,000 5% 1,000,000 50,000 100,000 6 3,000,001 4,000,000 6% 1,000,000 60,000 160,000 7 4,000,001 6,000,000 7% 2,000,000 140,000 300,000 8 6,000,001 8,000,000 9% 2,000,000 180,000 480,000 9 8,000,001 10,000,000 11% 2,000,000 220,000 700,000 10 10,000,001 15,000,000 13% 5,000,000 650,000 1,350,000 11 15,000,001 20,000,000 15% 5,000,000 750,000 2,100,000 12 2 ,000,001nd above 20%
  15. 15. Calculation of Personal Income TaxExample KyatsTotal income xxxxLess Basic Allowance (20% of income) * (xxxx)Less Spouse Allowance (max 300k)Less Children Allowance (each) (max 200k)Less Life Insurance Premium (xxxx)Less 25% of approved donation (xxxx)Taxable Income xxxx* Maximum allowance K.10,000,000
  16. 16. Commercial Tax Manufacturing Input tax (1) Output tax (2) ManufactureCustom Department IRD - Export sales in $ - nil except Sales in Kyat as per CTL - O & G, Teak, Hard Wood, Precious Stones Input tax on imported items will be calculated based on landed cost as per new revised rates; Output tax - as per rates prescribed in Commercial Tax Law;
  17. 17. Commercial Tax Rates on RevenueActivities % on Total Receipts USD KyatsTrading (purchase & sales of goods) 5 5Passenger Transport 5 5Entertainment 5 5Hotel, restaurants, lodgings 5 5Food & drinks 5 5Tourism business 5 5Cleaning & Oiling of motor vehicles 5 5Insurance business except life assurance business 5 5Beautifying and physical exercise business, hair dressing etc 5 5Printing 5 5Brokerage 5 5Design, Landscaping, Maintenance and Decoration 5 5Advertisement, Photo, Video, Editing, Distribution 5 5Lawyers, Certified Public Accountants 5 5
  18. 18. DTA Treaties with Myanmar United Kingdom Singapore India Malaysia Vietnam South Korea
  19. 19. Avoidance of Double Taxation Agreement United Kingdom Malaysia SingaporeDividends Exempt Exempt ExemptInterest No specific provisions up to 10% -up to 8% for banks and financial institutions -up to 10% for othersRoyalties Up to reasonable amount in up to10% up to 10% country where income arisesShipping Country which owns the Country which owns the Country which owns the shipping shipping line must collect the shipping line can collect 50% line can collect 50% tax due. tax tax due.Air Transport Country which owns the Country which owns the Country which owns the airline airline must collect the tax airline must collect the tax. must collect the taxTechnical Fees No specific provisions up to 10% No specific provisionsDate 12-3-1953 9-3-1998 23-2-1999
  20. 20. THANK YOU!

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