Brunei Darussalam

Inventory valuation

Inventories are generally stated at the lower of cost or net realisable value. Cost may be determined using one of several methods (e.g. unit cost, average cost, or first in first out [FIFO]), as long as the basis used is consistent for each year.

Capital gains

Brunei does not impose tax on capital gains.

Dividend income

Dividends accruing in, derived from, or received in Brunei by a corporation are included in taxable income, apart from dividends received from a corporation taxable in Brunei, which are excluded.

Dividends received in Brunei from certain countries are included in the tax computation by grossing up their value. A tax credit is then applied to offset the Brunei tax liability, reflecting taxes already paid in the source country under the applicable double taxation agreement (DTA).

Interest income

Interest income accruing in or derived from Brunei or received in Brunei from outside Brunei is subject to CIT.

Rental income

Rental income accruing in or derived from Brunei or received in Brunei from outside Brunei is subject to CIT.

Royalty income

Royalty income accruing in or derived from Brunei or received in Brunei from outside Brunei is subject to CIT.

Unrealised gains/losses

Unrealised gains/losses are not taxable until realised.

Foreign currency exchange gains/losses

Foreign currency exchange gains/losses are taxed when realised

Foreign income

A corporation, whether resident in Brunei or not, is taxed on foreign income when it is received in Brunei. There are no special rules for taxing the undistributed income of foreign subsidiaries.

Where income is earned from treaty countries, double taxation is avoided by means of claiming tax credit granted under those treaties.