Myanmar

Value-added tax (VAT)

There is no VAT in Myanmar.

Commercial tax

Commercial tax, at rates ranging from 0% to 15%, is levied as a turnover tax on goods and services. Generally, commercial tax is imposed at the rate of 5%. The commercial tax that a business charges and collects is known as output tax, which has to be paid to the Myanmar tax authorities. Commercial tax incurred on business purchases and expenses are known as input tax. Businesses that are registered for commercial tax can claim commercial input tax if certain conditions are satisfied.

Commercial tax is imposed on a wide range of specified goods and services traded, produced, or rendered within the country, based on the sales proceeds, and on imported goods (see Customs duties below for details). There are 47 types of goods exempted from commercial tax.

Most services are subject to 5% commercial tax, except for the services below:

• 15% commercial tax on the income earned from Internet services and a one-time commercial tax of 20,000 Myanmar kyats (MMK) on the sale of new mobile phone SIM cards upon activation.
• 3% commercial tax on the sale proceeds from construction, repair, and sale of infrastructure for a long-term lease of state-owned land or in cooperation with the state or in the private-owned land or in cooperation with the landowner. 
• 3% commercial tax on the receipt of hotel and tourism services. 
• 1% commercial tax on the sales proceeds from the sale of gold or jewellery or on the landed costs in case of imports from abroad.

There are also 34 types of services that are specifically exempt from commercial tax (e.g. life insurance, banking and financial services that are operated with the permission of the Central Bank of Myanmar, microfinance, public transportation, publishing services). 

No commercial tax is imposed if the proceeds from production and sales of goods, receipts from services, or proceeds from trading for a financial year are not more than MMK 50 million.

Commercial tax is zero-rated on all exports, except for electricity (8%) and crude oil (5%).

The Ministry of Planning and Finance, with the approval from the Union Government Cabinet, may grant relief or exemption from commercial tax in respect of activities carried out with donations or assistance of loans from domestic or foreign organisations.

Companies registered under the MIC/SEZ may, at the discretion of the MIC/SEZ Committee, be granted exemption from commercial tax during certain stipulated periods (see the Tax credits and incentives section for details).

Specific goods tax

The Specific Goods Tax Law replaces commercial tax on a list of specific goods that are imported into Myanmar, manufactured in Myanmar, or exported to a foreign country. The list of specific goods include cigarettes, tobacco leaves, virginia leaves, cheroots, cigars, pipe tobaccos, and betel-chewing tobacco; beers, wine, and alcoholic beverages; wood logs and wood cuttings; vans, saloons, sedans and estate wagons, and coupe cars except double cab 4-door pickups from the range of 1501 cc to 4001 cc and above; and kerosene, petrol, diesel, and aviation jet fuel, as well as natural gas. The specific goods tax rates range from 5% to 80%.

Specific goods tax is exempted on all exports, except for wood logs and wood cuttings, which are subject to tax at 10%.

Under the Specific Goods Tax Law, only a manufacturer of special goods can claim and offset the specific goods tax incurred on purchase of raw materials/semi-finished goods against the specific goods tax charged on sale of specific goods.

On top of specific goods tax, commercial tax of 5% will also be imposed.

Companies registered under the MIC/SEZ may, at the discretion of the MIC/SEZ Committee, be granted exemption from internal taxes, which may cover specific goods tax, during certain stipulated periods (see the Tax credits and incentives section for details).

Gems tax

Under the Union Taxation Law (UTL) 2023, gemstones (whether it is rough or cut or jewellery or things made with gemstones) shall be subject to gems tax in accordance with Section 38 of the Myanmar Gemstone Law 2019. The tax rates are ranging from 5% to 11%.

Customs duties

Customs duty is levied under the Customs Tariff of Myanmar (2017) at rates of up to 50%.

Companies registered under the MIC/SEZ may, at the discretion of the MIC/SEZ Committee, be granted exemption from customs duties during certain stipulated periods (see the Tax credits and incentives section for details).

Excise duties

Excise duty is levied on alcoholic drinks and is collected by the General Administration Department under the Ministry of Home Affairs.

Property taxes

Immovable property (land and buildings) in Myanmar is subject to property tax.

Stamp duties

Stamp duty is levied on various types of instruments, and some rates are given below:

• 2% of the amount or value of the consideration for conveyances of properties, for the sale or transfer of immovable property. Immovable properties located in Nay Pyi Taw, Yangon, and Mandalay are subject to an additional 2% of stamp duty on the consideration equal to the market value of the properties.
• 0.1% of share value for the transfer of shares.
• 0.5% of the amount or value secured for bonds.
• 0.5% of the annual value of rent for immovable properties lease agreements between one and three years, and 2% of the average annual value of rent where the term of the lease agreement is more than three years. 2% stamp duty will also be applicable on lease premium.

Capital gains taxes

Capital gains tax is levied on gains from the sale, exchange, or transfer of capital assets (i.e. any land, building, vehicle, and any capital assets of an enterprise, which include shares, bonds, and similar instruments).

Capital gains from the sale, exchange, or transfer of capital assets in the oil and gas sector (companies engaged in upstream oil and gas activities relating to exploration, drilling, and extraction) are taxed at different rates from those in other sectors.

Tax returns for capital gains must be filed within 30 days from the date of disposal of the capital assets. Capital gains tax payments are required to be made within 30 days from the date of disposal of the capital assets. Previously, resident taxpayers paid capital gains tax and other income tax in kyats, irrespective of whether they had foreign currency income. Now, resident taxpayers must pay tax in the type of currency received, in the same manner as non-resident taxpayers always had to.

Registration taxes

There is a registration fee of MMK 150,000 payable to the Directorate of Investment and Company Administration for setting up a private company or a branch in Myanmar. In addition to the registration fee, there may be other administrative expenses or stamp duty payable on the company’s constitution.

Payroll taxes

An employer is responsible for deducting income tax due from salaries at the time of payment to employees and must pay the amount within 15 days from the date of deduction. If the employer fails to deduct and pay the tax, the employer is deemed to be a defaulter and held responsible for such payment. In addition, the employer is also responsible for filing the statement of annual salary within three months after the end of the income year, and failure to file by the stipulated deadline may result in a penalty of 10% of the amount of tax to be deducted on annual salaries.

Social security contributions

An employer with five or more employees is required to provide Social Security Scheme benefits to those workers, such as health and social care insurance and insurance against employment-related injuries.

The rates of contribution by employees and employers are 2% and 3% of the total salaries and wages, respectively. The contribution must be made in Myanmar kyats for all currencies that the salaries are paid in within 15 days of the following month, using the exchange rate prescribed by the Myanmar Foreign Trade Bank (MFTB) on the first day of the relevant month.

The maximum contribution is limited to MMK 9,000 by the employer and MMK 6,000 by the employee.

Contributions made by the employees are deductible for tax purposes in the hands of the employees. The employer is obligated to withhold the employees’ contributions from their salaries.