Myanmar Tax Basics

Businesses in Myanmar are subject to corporate income, personal income, commercial, and property taxes. A 25 percent corporate tax rate per annum is applied to all companies incorporated in Myanmar under the Myanmar Companies Act and Foreign Investment Law. A branch of a foreign company is taxed at a rate of 35 percent per annum because they are considered nonresident by Myanmar tax laws, while other types of companies are generally considered resident.
Currently no taxes are collected for dividends received from companies by shareholders. For capital gains, there is a 10 percent capital gains tax for resident companies and 40 percent for nonresident companies. Under the Foreign Investment Law, tax incentives for foreign companies have been offered. Foreign companies incorporated under the Foreign Investment Law have tax exemptions for the production of goods and services and for reinvested profits. They also enjoy the option to accelerate depreciation, and there is also a 50 percent tax relief on export profits.

There are also withholding taxes on interest paid to companies, royalties and the procurement of goods within the country. Interest to a resident company is not taxed. The tax rate for interest paid to a nonresident company is 15 percent. Royalties paid to a resident company are subject to a 15 percent withholding tax. For nonresident companies, there is a 20 percent withholding tax. Amounts paid to a resident company for the procurement of goods and within Myanmar and services rendered are subject to a tax rate of 2 percent. For nonresident companies, the rate is 3.5 percent. Companies are also required to contribute to 2.5 percent of the employee’s total salary and wages to pension and social security funds.

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