Overview of Tax Compliance in Myanmar

A fundamental component of any nation's economic system is taxation, which is essential for maintaining social welfare, assuring the provision of public goods and services, and fostering economic growth. Myanmar, a nation in Southeast Asia with a vibrant economy and a rich cultural legacy, uses a tax structure to help it meet its financial goals. Myanmar has a self-assessment tax system, which means that taxpayers are in charge of figuring out their tax liabilities and meeting their duties in accordance with those findings. The Internal Revenue Department (IRD) is responsible for overseeing the nation's tax system.

Importance of tax compliance

Any functional economy must adhere to tax laws, and Myanmar is no different. Maintaining tax compliance enables the efficient operation of public services, the growth of infrastructure, and general economic stability. By paying their taxes on time, people and companies contribute to the funding for basic services like public safety, healthcare, transportation, and education.

Fairness is an essential component of tax compliance. Taxes are intended to spread the cost among the population according to each person's capacity to pay. Individuals and companies who abide by tax laws show their dedication to justice and equity by making their fair share of contributions in accordance with their revenue or earnings.

Types of taxes in Myanmar

• Corporate Income Tax: A corporate income tax is a tax applied to profits produced by corporations or businesses. Companies operating in Myanmar are legally required to comply with corporate income tax requirements. A corporation is deemed a resident company when it is created in compliance with the Myanmar Companies Law 2017 (MCL) or other relevant Myanmar legislation, and the firm's control, management, and decision-making are wholly headquartered in Myanmar, according to the Myanmar Income Tax Law. Businesses must keep correct financial records, report their earnings, and pay appropriate taxes by deadline. Noncompliance with business income tax responsibilities may result in penalties, fines, and legal ramifications. Corporate taxes vary from business to business.
• Capital Gains Tax: Profits from the sale of assets are subject to capital gains taxes. The amount of tax owed is determined by the length of time the asset was kept and the individual's income bracket. The tax is calculated by deducting the asset's acquisition price from its sale price and is subject to variable tax rates. The goal of capital gains tax is to produce money for the government while also ensuring that individuals and businesses pay taxes on investment gains. Capital gains are taxed at a 10% rate in Myanmar for both residents and non-residents, providing the value of the capital assets sold exceeds MMK 10 million. Land, buildings, vehicles, shares, bonds, stocks, or similar papers are examples of capital assets.
• Commercial Tax: A commercial tax of 5% will be levied. The commercial tax on special goods will be computed based on the selling proceeds, which include the special goods tax. The proceeds from building construction and sale will be subject to a 3% business tax. In addition, a 1% commercial tax will be levied on the sale of gold jewellery.
• Specific Goods Tax: Myanmar's Specific goods Tax (SGT) applies to specific designated items imported, exported, or manufactured within the country, such as cigarettes, alcoholic drinks, automobiles, timber, industrial oils, and natural gas. When particular taxable items are imported, manufactured, or exported, the importers, producers, or exporters are responsible for paying the tax. However, except for timber logs and wood cuttings, which are subject to a 10% tax, no special commodities tax is paid on exports. Importers must deposit the SGT payment before taking ownership of specific products. Manufacturers and exporters, on the other hand, are required to pay the SGT within ten days of the end of the month in which the relevant items were sold, exported or manufactured.
• VAT: There is no Value Added Tax in Myanmar. 

Taxing period in Myanmar

Taxpayers must comprehend the duration and conditions of the taxing period that applies to their specific tax obligations. A taxation period is a specified period of time during which taxpayers must calculate, submit, and settle their tax liabilities. It is a time period set by tax authorities to determine the taxable income or transactions of individuals or businesses. The length of a taxing period varies according to the tax jurisdiction and the type of tax concerned. Following the CBM's letter, the fiscal year for firms of this sort in Myanmar will run from April 1 to March 31, beginning with the fiscal year 2022-2023.

Double Tax Agreements

Double tax treaties, also known as tax treaties or double taxation treaties, are bilateral agreements between two nations that aim to prevent individuals and corporations from being taxed twice in both countries on the same income. These treaties are intended to minimize or limit the possibility of double taxation, stimulate cross-border trade and investment, and give taxpayers transparency and confidence. Myanmar currently has tax treaties in place with India, Malaysia, Singapore, Korea (Rep.), Thailand, the United Kingdom, Vietnam, and Laos. In addition, double tax treaties with Indonesia and Bangladesh must be ratified.

Tax Returns

A tax return is an official necessary paper that people or corporations submit to the tax authorities that discloses their income, expenses, and other relevant financial information for a given time. It is crucial in assuring compliance with tax legislation in a variety of nations, including Myanmar. Individuals and businesses are often obliged to file their yearly income tax returns three months after the end of the fiscal year. Capital gains tax returns must be filed within 30 days of disposing of assets; however, taxpayers who discontinue business operations must file reports within one month of ceasing operations. It is deemed purposeful fraud if a taxpayer fails to file their income tax returns while having earned assessable income.

Tax Payment

Corporate taxpayers must submit advance tax payments in four quarterly installments, due ten days after the end of each quarter and covering the entire tax year. These payments are determined using the year's expected total income. The advance payments, as well as any taxes withheld, are credited against the eventual tax liability. The ultimate tax liability must be settled within twenty-one days of the date the Internal Revenue Department (IRD) issues the notice. Capital gains tax, on the other hand, must be paid within 30 days of disposing of capital assets.

Services offered by Enterslice

We offer a variety of services in relation to tax and its regulation at a global level.

• Corporate Tax Advice (R&D Tax)

The following services are included:

• Determining who is responsible for claiming R&D incentives
• assisting in the establishment of methods and processes for gathering crucial information on R&D incentives
• helping to create and submit the application forms needed for the recognition and
• authorization of R&D facilities
• Identifying the costs that are eligible for R&D incentive claims
• preparing, reviewing, and facilitating R&D tax incentive claims

• International Tax Advice

Requirements for doing cross-border business, making sure rules and regulations are followed, handling transactions involving transfer pricing, and taking care of numerous tax-related issues.

• Corporate Tax and Regulatory Compliance Services

The full services relating to corporate tax compliance and advising are Enterslice's area of expertise. They give assistance on tax-related issues and offer a wide variety of experiences to make sure firms comply with their tax requirements

• Corporate Tax Advisory Services

Tax-related Guidance for both direct and indirect taxes, tax consulting services providing direction and suggestions on topics pertaining to taxes, and assistance with services including tax preparation, planning, and filing for both individuals and corporations. Giving recommendations and insights on ways to repatriate money or assets back from overseas to the client's home country while taking tax and legal ramifications into account is part of Advice about repatriation plans.

• Implementation of Corporate Tax
  • Assistance and Advice relates to Customs and Excise Duty
  • Advisory services related to Mergers and Equations matters
  • Advice on other types of Taxes is also provided by Enterslice