28 November 2022

The Myanmar Internal Revenue Department (“IRD”) issued Public Ruling No.3/2022 (“Ruling”) on 16 November 2022 setting out various rules relating to tax avoidance and tax evasion. This is the first ruling issued by the IRD pursuant to the Tax Administration Law that elaborates on the IRD’s position on tax avoidance and evasion. The Ruling will come into effect as of 1 January 2023.

The Ruling clarifies that a taxpayer is regarded as committing tax avoidance if he fully understands tax laws and breaches the “tax ethics” with the purpose of avoiding and/or reducing his taxable income and/or tax liability. However, the current law does not define or provide for the criteria identifying “tax ethics”.

The Ruling further provides that violation of tax laws resulting in massive losses of State revenue or the commission of multiple violations of tax laws will be regarded as tax evasion, triggering criminal liability and fines.

Various scenarios, where certain taxpayer activities may be regarded as tax avoidance, the making of negligent or fraudulent underpayment, or the making of false or misleading statements, are enumerated in the Ruling. These scenarios are summarised in the table below.





Tax avoidance

·         Failure to disclose assets, property, services or benefits in accordance with market price

·         Making non-arm’s length transfers in cross-border transfer pricing

·         Splitting income between taxpayer and associated enterprises with the purpose of reducing the total tax payable on income

·         Reorganising the structures of associations in order to enjoy tax benefits

·         Abusing bilateral or multilateral tax treaties


Making negligent or fraudulent underpayment

·         Deliberately not filing a tax return for a certain period

·         Underreporting income and revenue

·         Fraudulently claiming tax reliefs

·         Fraudulently applying for asset depreciation

·         Using or submitting false documents or fictitious invoices

·         Receiving tax credits on input tax fraudulently

·         Omission of output tax

·         Failure to affix tax labels on receipts

·         Failure to affix tax labels on the identified specific goods

·         False or incorrect bookkeeping due to either person or machine


Making false or misleading statements

·         Intentional omission of income and revenue

·         Making false or misleading statements in tax returns

·         Submitting false or misleading statements in response to tax authority enquiries

·         Keeping or submitting false or misleading accounting records and documents

·         Importing or exporting commodities illegally

·         Disposing of assets in order to avoid recovery of tax by tax authority

·         Omission of bank account information

·         Keeping more than one set of the same financial statement