Preparing the FY2019-2020 Year-End Tax Position for Myanmar

With limited time left to settle outstanding tax payments for FY2019-2020 in order to avoid being exposed to penalties, taxpayers need to make sure their tax position is adjusted in accordance with the updated tax laws and regulations. Below is a checklist of key notes for preparing the FY2019-2020 year-end tax position.

Have you considered COVID-19 tax reliefs and exemptions?

All taxpayers are entitled to non-refundable COVID-19 tax credits and tax-deductible expenses. As the non-refundable tax credits cannot be carried forward to the following financial year or requested to be refunded by the Internal Revenue Department (“IRD”), it is important to apply such credits before processing any payable Corporate Income Tax (“CIT”) for the fourth quarter of FY2019-2020.

Details on applying non-refundable tax credits and tax-deductible expenses are discussed in our article below: 

Myanmar’s COVID-19 Economic Relief Plan: Navigating Tough Times With Tax Reliefs

Have you utilized input Commercial Tax on capital assets?

Starting from FY2019-2020, all taxpayers can offset input Commercial Tax (“CT”) paid on capital assets against the output CT charged to customers. Since carry forward of unutilized input CT on capital assets is not explicitly allowed under the current regulations, the taxpayer should make sure to utilize all input CT on capital assets, and in the event that there is any unutilized input CT on capital assets, such input CT should be claimed as a business expense when calculating CIT.

Which tax payments can be processed until the end of December 2020?

Undisclosed income under the tax amnesty rates of Union Tax Law 2019 can be still processed until the end of December 2020 provided that an application for tax assessment on the undisclosed income has been submitted to the IRD by 30 September 2020. If the IRD has already assessed and issued a payment voucher (chalan), the payment for chalan can be made until the end of December 2020.

In addition, certain sectors have been directly and significantly impacted by COVID-19 economic repercussions, including Cut, Make, and Pack businesses that use imported raw materials for production and export finished goods, hotels, tour companies, and Small and Medium Enterprises; for these sectors, CT and CIT payments for FY2019-2020 can still be made until the end of 31 December 2020 without any penalties. 

Conclusion

Amid the COVID-19 pandemic and stay-at-home restrictions, we understand that taxpayers have difficulty with tax payments and filings as well as meeting year-end deadlines. We would encourage taxpayers to use electronic payment and filing platforms implemented by the IRD as much as possible to mitigate the risks of COVID-19 by reducing physical contact. In addition, in order to meet the year-end tax payment deadlines for FY2019-2020, all taxpayers apart from the sectors mentioned above should ensure that their CT and CIT payments are processed by 12 October 2020 and Personal Income Tax of their employees should be processed by 15 October 2020 assuming salary disbursements are made on 30 September 2020.