Country report (Myanmar) Presented by Kyaw Ye' Tun Assistant Director Internal Revenue Department Ministry of Finance and Revenue

Introduction  Situated in South East Asia  North & northeast - China  East & southeast - Laos & Thailand  South - the Andaman Sea & the Bay of Bengal  West - Bangladesh & India

Introduction (Continued)  Total land area - 676,000(s) kilometers  From east to west kilometers  From north to south kilometers  In the tropical monsoon zone  Three seasons - the hot season (March to May) - the raining season (June to October) - the cold season (November to February)

 Total population million  Ethnic groups- 135  Predominant language- Myanmar  Main religion- Buddhism  Full freedom of worship for other religions  Rich in natural & human resources  Need capital & high technology in every field Introduction (Continued)

Myanmar tax policy  Based on the following objectives: - To raise resources to finance government expenditure - To attain a balance budget - To check economic inflation - To coordinate domestic consumption, investments and savings

 To reduce the wealth gaps between the rich and the poor  To discourage the consumption of some commodities  To achieve other desirable goals  To invite participation in terms of technical know-how and investment from sources inside the country and abroad Myanmar tax policy (continued)

Taxes & duties administered by IRD (kyat in billion) State revenue IRD tax collection % % % % % %

Taxes & duties administered by IRD (continued) Composition of tax revenue from( )to( ) (kyat in billion)

Profit Tax  Tax on income  Kind of tax for self-employed individuals  Resident citizens not being salary or wage earners  Association of person not being companies  Not cover by income tax law, subject to profit tax law  Minimum income liable to tax is K 10,000  Income from production of goods or transport services the tax payable is 10% less

 Income from production of cheroots 10% more  If income exceed K 300,000, tax payable = % of amount exceeds K 300,000  Tax payable based on 50 income level  Capital gains – 10% flat  Prepare to repeal this profit tax law after Constitution comes into operation Profit Tax

 Supplement by Income tax rules, regulations, the state budget law and notification issue from time to time  State economic enterprises, salary earners, firms, companies, association of person  Total income from in and outside Myanmar  Nonresident foreigner for the income received in Myanmar  Comprises corporate income tax, individual income tax, capital gain tax and withholding tax Income Tax Law (1974)

Depreciation Allowance  Building- 1.5% to 10%  Furniture and fitting- 5% to 10%  Machinery and plant- 5% to 10%  Machinery equipment- 2.5% to 20%  Waterway transport- 5% to 10%  Road transport vehicles- 12.5% to 20%  Miscellaneous- 10% to 20%

Deduction The persons who are responsible for salaries income:  The Head of Government organization  The owner of enterprise  Association of persons, a member of management  The president or the secretary, for co-operative society  General manager or manager of a company

Withholding tax Resident Non-Resident Foreigner Foreigner (a) interest - 15% (b) royalist for use of license, trade marks patent rights 15% 20% (c) Gross income (Receipt) from contracting works done for state organizations development committees, and Co-operatives societies 3% 3.5% (d) Receipt from contracting work2.5% 3%

Rate of the income tax Resident Foreigner; (i)A foreigner who resides in Myanmar for not less than 183 days (ii) A company formed wholly or partly with foreign share holders (iii) As association management and decision making of its activities wholly in Myanmar Non-Resident Foreigner; is not a resident foreigner in Myanmar.

The income from salary: salary, wages, annuity, pension, gratuity and fees, etc: Profession: a doctor, a nurse, a lawyer, an Engineer, an architect, a film artiste, etc: The Capital Gain: profit realized from the sale, exchange, or transfer of capital asset. Capital asset: land, building vehicle and any capital asset connected with the business. Rate of the income tax

Resident Non-Resident Foreigner Foreigner (a) Salary 15% 35% (b) Capital gains other than oil and natural gas sector10% 40% (c) Income from other than salary 30% 35% Rate of the income tax

Avoidance of Double Taxation agreements (a)United Kingdom (b) Malaysia (c) Singapore (d) Vietnam (e) Thailand (f) Korea (g) Bangladesh (h) Indonesia (i) India

Commercial Tax A turnover tax, like VAT or sale tax. (a) Goods produced within the state and sold domestic and abroad, (b) Goods imported from abroad, (c) Services rendered within the state. There is chargeable to pay tax only on 10 kinds of services rendered within Myanmar.

Commercial Tax Schedule 1 list item of goods exempt from the tax, 5% for Schedule 2 list items of goods, 10% for Schedule 3, 20% for Schedule 4, 25% for Schedule 5 and Schedule 6 represents specific types of goods ranging from 30% to 200%. Pay tax in foreign currency: (i) any commodity (Schedules 1 to 6 of Commercial Tax Law) rate of 8% (not including export sale of CMP );

Commercial Tax (ii) 9 kinds of services, the foreign currency includes in the receipts, prescribed rates according to the type of services. (iii) In border trade, the goods are imported from abroad, the commercial tax, will be levied with the currency used in import transaction.

 15 types of taxes and duties under the 4 major head namely - (a) Taxes levied on production & consumption (b) Taxes levied on income and ownership (c) Customs duties (d) Taxes levied on the utility of state own properties Myanmar tax structure

Taxes levied on domestic production and public consumption  Excise duty - General Administration Department  Commercial Tax - Internal Revenue Department  License fees on - Customs Department imported goods  State Lottery - Internal Revenue Department  Taxes on transport - Road Transport Department  Sale proceeds of stamps - Internal Revenue Department Myanmar tax structure

Taxes levied on income and ownership  Income Tax- Internal Revenue Department  Profit Tax- Internal Revenue Department Customs Duties  Customs duties- Customs Department Myanmar tax structure

Taxes levied on utilization of State owned properties  Taxes on land - General Administration Department  Water tax and - General Administration embankment tax Department  Tax on extraction of - Forest Department forest products  Tax on extraction of - General Administration mineral Department  Tax on fisheries- Fishery Department  Tax levied on rubber- Forest Department Myanmar tax structure

 Trying to introduce self-assessment system  Preparing establishment of integrated network systems  To raise the rate of taxpayer’s compliance  Promote solidarity, mutual amity and mutual assistance among the ASEAN Nations Conclusion