Myanmar’s tax regime has undergone significant changes since the 2012 Reform Action Plan of the previous government. The plan includes broadening the tax base while lowering rates, placing reliance on indirect taxes, introducing self-assessment in direct taxation and rationalising the tax incentive system for investment.

New Features 

To this end, on March 15, 2012, the government issued 22 notifications, serially numbered 102/2012 to 123/2012 to bring changes to the Income Tax Law (ITL), Commercial Tax Law (CTL), Myanmar Stamp Act (MSA) and Court Fees Act. According to these notifications, the income tax (IT) sector saw the corporate income tax (CIT) rate reduced to 25%, threshold amounts introduced for imposing tax on income under different headings, capital gains were raised and progressive rates reduced, while the commercial tax (CT) sector witnessed CT rates on various goods and services dropped to a flat 5%. At the same time, basic spouse and children allowances and other tax relief schemes were enhanced. The threshold amount for imposing commercial tax (CT) was determined at MMK10m ($7638) while the tax base was broadened with the inclusion of a select few more goods and services in the list of taxable items. Stamps duties and court fees were enhanced in line with market inflation. All of these changes were effective beginning on April 1, 2012. Between 2012 and 2017, the government pushed forward tax regime changes by introducing several amendments to ITL, CTL and the MSA. To implement these changes with greater momentum, the Union Taxation Law (UTL) was enacted on March 28, 2014 and is to be passed by the Pyidaungsu Parliament annually.

One of the main functions of the UTL is to make changes relating to taxation matters so as to broaden tax bases and reduce tax rates while enhancing tax collection without affecting the annual budget needed for the country’s economic development. Under UTL 2014, UTL 2015 and UTL 2016 the capital gains tax (CGT) rate and personal income tax (PIT) rate applicable to non-residents were aligned with lower rates prescribed for residents. Moreover, thresholds for salary incomes and CGT were further increased.

Another significant step was the Special Goods Tax Law (SGTL) in 2016 for regulating higher rates, put in place under the CT. This is considered a step towards the transformation of CT into value-added tax (VAT) so as to be in line with international best practices. Progress in tax administration was also made through the introduction of a self-assessment system (SAS) in effect from FY 2014/15. Within a few years, SAS will replace the current Official Assessment System (OAS). Stamp duties relating to bonds, conveyances, leases and transfer of shares or debentures were also sharply reduced through the amendment of the MSA.

Further, under UTL 2017, the Ministry of Planning & Finance has been empowered to grant exemption and relief from CT and IT, with the approval of the Union Government regarding CT and IT matters relating to businesses operated with the donation, aid and loan provided by local and foreign organisations as well as grant relief from IT regarding public companies listed with Yangon Stock Exchange (YSX) for the development of the securities market. These changes have been in effect since April 1, 2017. Under Notification No. 51/2017 dated May 22, 2017 withholding tax (WHT) rates were further reduced in respect to royalties for both residents and non-residents, and for payments to non-residents. WHT for residents and non-resident regarding any lease rent was also introduced. Threshold amounts regarding WHT on each payment under OAS and SAS were also increased as of April 1, 2017.

Tax Structure & System 

Three major taxes categorised as IT under Myanmar Income tax Law (MITL) 1974, the Special Goods Tax (SGT) under SGTL 2016 and CT under CTL 1990 are collected by the Internal Revenue Department (IRD).


Income is computed under the classifications of “salaries”, “profession”, “business income”, “property rent”, “capital gains”, “income escaped from assessment” and “other sources”. Of these, income pertaining to professions, business and other sources is calculated with tax obligations assessed on total income. Income under the remaining headings is taxed separately and individually. IT is imposed on net income (gross income less deductible expenses) accrued by a taxpayer over an income year.


A corporation formed under the Myanmar Companies Act is a resident, while a corporation incorporated overseas and registered locally as a branch is a non-resident. Resident companies are taxed on worldwide income. However, foreign branches (non-resident) and companies operating under the Myanmar Investment Law (MIL) 2016 are taxed only on income from Myanmar sources. Both resident and non-resident companies are taxed at the uniform tax rate of 25% on net profit. However, public companies listed with YSX are taxed at the reduced rate of 20%. In computing taxable income, all expenditures incurred exclusively for the purpose of earning income are deductible. Payments made to a company or cooperative society or for professional services are also deductible. However, expenditures deemed to be capital, personal, not commensurate with the volume of business, or an inappropriate expense not incurred for the purpose of earning income or payment made to a member of an association, are not deductible.

Depreciation allowance in respect to capital assets is allowed as a deduction at prescribed rates on a straight-line basis for the income year. A full-year’s depreciation can be claimed for the year in which a capital asset is acquired, irrespective of whether the asset is used for the whole or part of that year. However, no depreciation is allowed in the year of disposal. Dividends received are exempt from income tax. The taxable income of foreign branches is computed according to (i) branch profits, if accounts are complete or acceptable; (ii) a proportion of worldwide profits adjusted in accordance with MITL; and (iii) deemed profit, a reasonable percentage of gross income ranging from 5% to 10% or any other basis deemed reasonable if income cannot be ascertained accurately.


This tax is payable on gains from the sale, exchange or transfer of any capital asset (including shares, bonds and securities) of the business in any currency if the sale value of all assets disposed in an income year exceeds MMK10m ($7638). The CGT at the uniform rate of 10% is applied to both residents and non-residents. However, for businesses in the oil and gas sector, the progressive rates ranging from 40% to 50% are applicable on capital gains. Tax returns in respect to capital gains must be filed within 30 days from the date of transaction, while tax payment in the currency in which such gains arose shall also be made within this period.

Off-set & Loss Carry Forward

Business losses from any source may be off-set against profit from any other source of income earned within the same income year. Capital losses cannot be offset against future capital gains or taxable profits. Unabsorbed losses of a year can be carried forward for up to three consecutive years and off-set against future profits.


The WHT is applicable to both payments to residents and non-residents. A payer is required to withhold income tax at the rates shown below in respect of the following payments at the time of disbursement:

• Interest payments rates for residents are 0% and 15% for non-residents;

• Royalty payments for the use of licences, trademarks and patent rights are 10% and 15% for residents and non-residents, respectively;

• Payments by state organisations, state enterprises, development committees, co-operative societies, foreign companies, foreign enterprises and organisations, local companies and partnership businesses registered under an existing law for purchase of goods, work performed or supply of services, and leasing within the country under a tender, contract, quotation or other modes are 2% and 2.5% for residents and non-residents, respectively.


The WHT is not applicable if the payment amount to taxpayers under OAS does not exceed MMK 500,000 ($382). In the case of payment to taxpayers under SAS the threshold amount is MMK1.5m ($1146).


Tax withheld at the time of payment shall be deposited in the name of recipient to the IRD within seven days from the date of withholding. Payments made within seven days after the end of a fiscal year will be deemed as payments within the relevant fiscal year. Tax withheld from payments to residents and branch offices of non-residents will be off-set against the tax due under final assessments, whereas tax withheld from payment to non-resident foreigners is a final tax. An advance IT of 2% is imposed by the IRD on imports and exports. However, certain taxpayers under SAS have been exempted from advance tax payment effective January 1, 2018.

Tax Year

The standard tax year in Myanmar ends on March 31.


The taxpayer estimates their annual income and pays the estimated tax advance in quarterly instalments within 10 days after each quarter ending on June 30, September 30, December 31 and March 31. Advance tax paid within 10 days following the last quarter will be deemed a payment within the income year.


The law prescribes fines at 10% to 100% of additional tax due, depending on the type of default or offence relating to income tax provisions, and imprisonment from one to 10 years for not disclosing or concealing income.

Administration & Compliance

Starting from FY 2014/15, the IRD introduced the SAS to replace OAS in phases, starting from FY 2014/15, to encourage voluntary tax payments and to modernise the assessment processes to suit the needs of Myanmar. Implementation of the SAS began with targeting large taxpayers through the establishment of a Large Taxpayer’s Office (LTO). The Companies Circle Tax Office was restructured internally by establishing Medium Taxpayers’ Offices (MTO) – MTO 1, MTO 2 and MTO 3 – so as to extend SAS coverage in phases, from the highest taxpayers to the next levels of taxpayer, according to the taxpaying ranges determined by the IRD. SAS implementation was extended to MTO 1 in FY 2016/17. Preparation for SAS implementation to MTO 2 is ongoing. Unless extended, MTO 2 and MTO 3 will remain under OAS jurisdiction. During this period the SAS and OAS will be simultaneously in place regarding tax assessment.

SAS: Under the SAS, taxpayers must assess their own tax liabilities, completing tax-returns by furnishing the necessary financial and other relevant data, filing them on or before June 30 with the relevant taxpayers’ office. A signed declaration confirming the correctness and completeness of information given on the tax return shall be made by the taxpayer or their representative. It is not necessary to submit financial statements.

Tax Analysis & Audit Process 

The tax offices conduct audits on the tax returns selected on the basis of risk analysis procedures according to the Tax Audit Manual adopted by the IRD. The tax audit is performed by verifications of documents and the physical inspection of assets in accordance with the manual. During the course of the audit, findings are communicated verbally. If business profits are accepted as per the returns, a demand notice specifying zero tax liability is issued. In cases where adjustments result in additional tax liability, the taxpayer is asked to sign, signifying concurrence to the adjustments. The taxpayer has the right to decline and lodge an appeal. The audit report – covering weaknesses, suggestions on improving maintenance of accounts and justifications regarding adjustments needed in respect of profit reported in returns and other issues deemed to be important – is then issued.


Taxpayers, who are subject to the SAS, must maintain a number of documents and records broadly classified as prime records, summary records, corporate records, contracts and financial statements. Income records, expenditure records, inventory records, asset records (fixed assets register) and other relevant records must also be maintained. These records may be paper based and/or electronic, in either English or the Myanmar language. Records must be kept for a minimum of five years. Failure to keep records or failure to preserve them for the necessary five years will be considered an offence and will be subject to penalty.


Income tax returns must be filed with MTO 2 and MTO 3 within three months of the end of the income year, together with financial statements audited by Certified Public Accountants. However, tentative unaudited financial statements may be filed with the prior approval of the IRD on specified reasonable grounds. Revised tax returns may be filed before or at the time of hearing for assessment. MTO 2 and MTO 3 review the IT and CT returns simultaneously and issue a summons to the taxpayer for submission of supporting documents for the tax hearing. Statements given in response to queries raised during the hearing are also officially recorded. After computing final tax liability, the notice of demand is issued specifying the tax amount payable and the due date of payment. Excess tax may be refunded or carried forward as an advance for the subsequent year’s tax payment.

Tax Audit 

If there is suspicion of concealment or fraud, the IRD will conduct an audit according to its audit manual. There is no time limit for a tax audit.

Tax Appeal

Taxpayers may lodge a first appeal to the Union Region Revenue Officer, Region/State Revenue Officer or Head of Office of relevant LTO or MTOs provided the tax amount exceeds MMK30,000 ($23). The Memorandum of Appeal must be submitted within 30 days from the date of receipt of Notice of Demand or Assessment Order after paying the demanded tax amount in full or fulfilling conditions set by the revenue authorities if the tax amount is not paid in full. A second appeal to a revenue tribunal lies within 60 days from the date of receiving an appeal order passed by tax offices in which the first appeal was lodged, if the tax amount exceeds MMK100,000 ($76). Final appeal to the Supreme Court can be lodged only on question of law.


Myanmar citizens and resident foreigners are taxed on their worldwide income. A foreigner is a resident if stays in Myanmar total 183 days or more in a fiscal year, whereas total income comprises salary, profession, property, business and other sources of income. Non-resident foreigners are taxed only on income accrued in or earned from Myanmar. Foreigners working in companies operating under MIL are permitted to pay IT on income received within Myanmar only. Personal allowances (basic, parents, spouse, children, insurance premiums and social security contributions) can be deducted from residents’ assessable salary income. Tax rates on income of residents after deducting legitimate allowances are set at progressive slab rates ranging from 0% to 25%. The rate applicable to the taxable income of residents amounting up to MMK2m ($1528) after deducting legitimate allowances is 0%. Annual salary income not exceeding MMK4.8m ($3666) is not assessable. Employers must withhold salary tax monthly at the time of salary disbursement and deposit the sum deducted within seven days. Monthly Salary Statements showing the salary amount and tax deducted must be filed with the relevant Township Revenue Office before paying tax. An Annual Salary Statement must also be filed on or before June 30. Non-resident foreigners are required to pay tax in the currency in which income is earned. Tax rates applicable to the income of a non-resident are also at progressive slab rates ranging from 0% to 25%. The rate applicable to the taxable income of non-residents amounting up to MMK2m ($1528) is 0%. Non-resident foreigners cannot enjoy allowances.

Social Security

Employers with five or more staff must register with the relevant Township Social Security Office. Both employers and employees are required to contribute towards a social security scheme based on the employees’ monthly wages at 2% each for health and social care. Employers must contribute an additional 1% of the employees’ wages for injury benefit. Maximum monthly contribution is limited to MMK9000 ($7) by employer and MMK6000 ($5) by employee and must be paid within 15 days of the following month. Employee contribution is deducted by the employer from their wages and is itself also deductible.


This tax is applicable to 17 items termed “special goods” as of April 1, 2016. Previously they were subject to CT under CTL. Some items are subject to a SGT on both local and export sales. The items and their SGT rates are as follows: cigarettes are taxed between MMK4 ($0.003) and MMK16 ($0.012) per stick on criteria determined on the basis of market price per packet. Tobacco and Virginia cured tobacco are at 60%. Cheroots are taxed at MMK50 ($0.0002) to MMK1 ($0.0004) per stick on criteria determined on the basis of market price per stick. Cigar, pipe tobacco and betel chewing preparations are at 80%. Liquor taxes range from MMK91 ($0.07) to MMK5911 ($5) per litre based on criteria on the basis of market price per litre ranging from MMK750 ($0.573) to MMK26,000 ($20) per litre, and 60% on one litre value if the one litre price exceeds MMK26,000 ($20). Wine can be taxed up to MMK81 ($0.062) to MMK5254 ($4) per litre based on layers and ranges similar to liquor, 50% on the one litre value if one litre price exceeds MMK26,000 ($20). For logs and hardwood conversion: 5% on local sales and 10% on export sales. Raw jade is taxed at 15% on local sales and export sales. For local and export sales, raw ruby, sapphire and other precious gemstones and jewellery are at 10% while finished goods of jade, ruby, sapphire and other precious gemstones and jewellery are at 5%. Light vans, saloons, sedans, light wagons, estate wagons and coupes from 1501cc to 2000cc are at 20%, from 2001cc to 4000cc at 30%, and 4001cc and above at 50%. For local sale and import kerosene, gasoline, diesel oil and jet fuel are taxed at 5% while natural gas at 8% for local and export sale.

Charge of Tax 

The SGT is charged on importation, manufacturing within the country and exportation of Special Goods (SG) (luxury and natural resources) at the prescribed rates: first, in case of importation, on the date of Custom clearance of duty; second, in case of manufacturing within country on the date of selling or date of manufacturing; and third, in case of SG owned but not paid, on the date of finding.

Timing for Payment 

In importation, the SGT is payable prior to clearance of goods. In manufacturing; the tax must be paid within 10 days after the end of the month of sales, or within 10 days after end of the month of being manufactured; in exportation; tax must be paid within 10 days after end of the month of export; and in cases where the SG but not the SGT is paid; within 7 days from the date of finding or scrutinising.

Off-setting Tax 

The manufacturer or exporter who imported or purchased any SG from other manufacturers of SG for their own use in manufacturing or for export is entitled to off-set SGT paid while importing or purchasing against the SGT payable on sales or export.

Registration & Filing 

The manufacturer, importer or exporter of any SG must register annually with relevant Township Revenue Offices and file quarterly returns within 10 days after the end of the quarter.


The threshold for selling manufactured tobacco, cheroot and cigars in Myanmar is MMK20m ($15,276) per year.


An SGT assessment may be made quarterly based on tax returns filed by the assessee if it is deemed correct and complete with all relevant details. However, if it is deemed to be unreliable, the SGT assessment will be made by scrutinising necessary evidence.


In Myanmar, in lieu of VAT, CT is levied on goods sold. This includes locally produced goods, exports of certain goods, importation, trading and on services rendered within Myanmar. Exemptions may be granted on goods and services considered basic and essential.


As of August 8, 2017 pure gold and gold bullion were added to the exemption list. There are 88 items of goods and 29 types of services exempted from CT. CT threshold is MMK50m per year ($38,191).


A flat rate of 5% is levied on non-exempted goods and services. It should be noted that 17 items of special goods are now subject to SGT in addition to CT, which is calculated on the total sum of sales price plus SGT.


CT can be off-set (within the relevant financial year) to businesses registered under CTL only if necessary conditions are satisfied. Only CT paid on landed cost of goods imported, domestic purchase of goods from another manufacturer or trader or importer, and service charges for services procured in connection with manufacturing or trading or service enterprises can be off-set. No off-set is permitted on CT relating to the acquisition of capital and fixed assets.

Timing for Payment & Filing

Monthly CT must be paid within 10 days of the following month, and returns must be filed quarterly within one month after each quarter ending on June 30, September 30, December 31 and March 31. Annual returns need to be filed within three months of the end of the income year. OTHER TAXES/DUTIES: Customs duty is payable according to the Custom Tariff of Myanmar at rates between 0% and 40%. Excise duty as licence fees on alcoholic beverage sales are collected by the General Administration Department. Property tax is levied on immovable property as determined by the City Development Committee. Royalties at prescribed rates are payable on extraction of Myanmar’s natural resources. Stamp duty is payable on instruments at different rates prescribed by the MSA and is payable in Myanmar kyat prior to or on the date instruments are executed.


Punishments are listed below.

SGTL: Punishment for failure to register, failure to provide particulars for determination of market price equal to MMK5m ($3819), and acquiring and possession of SG on which no tax was paid is taxation of 100% of the value and seizure of goods. Failure to pay tax within the prescribed time will incur a penalty of 10% of additional tax payable under assessment. If there is a failure to furnish quarterly returns in time, a penalty of 10% of the additional tax payable under assessment is required, while failure to affix tax labels incurs a fine at 50% of the value. Evasion of tax or concealment of particulars:

• If a taxpayer discloses in full within the specified time – tax due plus penalty equivalent to the amount of additional tax payable;

• Failure to disclose within the specified time or disclose complete particulars – tax due plus penalty equivalent to the amount of additional tax payable and either an imprisonment term not more than 3 years or a fine not more than MMK1m ($764), or both; and

• Deliberately furnishing a false return and false evidence will lead to a penalty of three times the tax due and imprisonment for a term not exceeding three years, or a fine not exceeding MMK3m ($2291), or both.

CTL: A fine of 10% or 100% of additional tax due, depending on default type, not more than one year’s imprisonment and/or a fine of MMK100,000 ($76) for not disclosing or for concealing income. Failure to issue an invoice or receipt to a purchaser or service recipient is a fine of 100% of tax due on the value of an invoice or receipt and a fine at MMK200,000 ($153), MMK500,000 ($382), MMK700,000 ($535) and MMK1m ($764) for the first, second, third and every time thereafter, for each type of default made within a financial year.

STAMP DUTY: Fine is levied at 10 times the prescribed duty or deficient portion for not duly stamping on or before executing the instrument.

Double Taxation Agreements 

Myanmar has signed double taxation agreements (DTAs) with the UK, Malaysia, Singapore, Vietnam, Thailand, South Korea, India, Laos, Indonesia and Bangladesh. DTAs with all but Indonesia and Bangladesh are in effect.

Forthcoming Changes

Taxpayers are expected to witness changes in the income year 2018/19. First, the draft of UTL 2018 has been prepared for submission to Parliament. If passed and signed by the president the charges will be effective from April 1, 2018. Second, state organisations and enterprises will see the current income or fiscal year ended March 31 changed to year ending September 30. In order to achieve this the first period will comprise of six months from April 1, 2018 to September 30, 2018. Thus the successive income years will be commencing on October 1 and ending on September 30 of the following year. However, in the case of private enterprises the income year will remain the same, that is, from April 1 to March 31. Third, CT will not be applicable to locally sold or exported diamonds and emeralds. Pure gold and gold bullion will be included in the CT exemption list. Lastly, any association of persons in the form of partnerships will be taxed at progressive rates ranging from 0% to 25% regarding rental income instead of the current flat rate of 10%.

Critical Issues

The SAS shifts the burden of computing tax liability on the assessees. There are several limitations that currently impede SAS implementation. First, non-deductible expenses include subjective phrases, such as “Expenses not commensurate with the volume of business”, “inappropriate expenses”, “expenses not incurred for the purpose of earning income”. Second, in the absence of specific guidelines from tax authorities, it is difficult for taxpayers to compute their own tax liabilities. Third, the Myanmar Accountancy Council has issued Myanmar Accounting Standards (MAS) and Myanmar Financial Reporting Standards (MFRS) which shall be compulsorily and consistently applied in the preparation of financial statements so as to reflect true and fair financial performances. However, tax authorities do not recognise accounting standards based on fair value principle such as MAS 1-Presentation of Financial Statements, MAS 2-Inventory, MAS 11-Construction Contract, MAS 16-Property, Plant and Equipment or MAS 41-Agriculture. Lastly, the adoption of MAS 12-Income Taxes is also a challenge as the tax authorities do not maintain records necessary for the application of the standards. Without the recognition of the MAS and MFRS, taxpayers will continue to have difficulties estimating their tax liabilities in a reasonable manner. Existing tax laws, rules and regulations, which are principally based on the OAS, could be amended so as to come in line with international tax administration.