Myanmar issues Union Tax Law for financial year 2024-2025
On 29 March 2024, Myanmar’s State Administration Council enacted the Union Tax Law for the financial year starting 1 April 2024 and ending 31 March 2025 (“2024 UTL”). The Union Tax Law has been issued annually for the coming financial year since 2014.
This article summarises some of the key changes in the 2024 UTL.
Income tax
The 2024 UTL provides that tax on income received in foreign currency must be paid in that currency instead of in Myanmar kyats. Prior to the enactment of the 2024 UTL, a distinction was made between citizens and foreign residents in Myanmar and non-resident taxpayers in relation to the currency in which tax liabilities were to be paid.
Personal income tax rates remain largely unchanged with the exception of Myanmar non-resident citizens who receive salaries overseas who will be taxed at either the official Central Bank of Myanmar exchange rate after deduction of reliefs under the Income Tax Law or at a flat rate of 2% without deduction of the reliefs. Any tax paid abroad will be deducted from tax liability incurred in Myanmar.
The corporate income tax (“CIT”) rate remains at 22% with the continuing exception of companies listed on the Yangon Stock Exchange which are subject to 17% CIT and companies engaged in the oil and gas exploration and production sector which are subject to 25% CIT. Capital gains tax remains at a rate of 10%, except for companies engaged in oil and gas exploration and production sector where they are subject to the higher rate of 40% to 50%.
Commercial tax
Manufacturers, traders and service providers exceeding the statutory annual threshold of MMK50,000,000 (approximately S$32,500) are required to register for commercial tax. The general commercial tax rate on the import or sale of goods or provision of services remains unchanged at 5%. A reduced rate of 3% continues to apply for construction, repair, and sale of infrastructure via long-term lease of Government-owned land or as a joint venture with the Union and 15% commercial tax will continue to be levied on all income from internet services
The 2024 UTL continues to list a number of goods exempted from commercial tax, with one addition raising the number to 47. Exempted for the first time are goods exported for repairs due to damage or defect under the applicable customs procedure and re-imported in the original state after repairs on a repair-and-return basis without any major alteration.
Other changes
In addition to commercial tax, Myanmar also levies specific goods tax on certain goods that are imported into Myanmar, manufactured in Myanmar, or exported outside Myanmar. The 2024 UTL has increased the specific goods tax applicable to cigarettes, liquor, and wine.
The 2024 UTL makes no change to gemstone tax with the sale of gemstones in Myanmar continuing to be subject to tax of 5% to 11% depending on the type of gems being sold and whether they are sold as raw stone or finished jewellery.
