Tax Note: What’s in store for taxpayers under the Union Tax Law 2018?March 9, 2018
The financial year-end is approaching and the Union Parliament (the Pyidaungsu Hluttaw) finally announced the draft Union Tax Law (“Draft UTL”) 2018 on 13 February 2018, which will go into effect on 1 April 2018.
The Draft UTL finally clears up the confusion regarding changes in the financial year. The income year will remain the same (i.e. 1 April to 31 March) for all taxpayers apart from state-owned enterprises, whose income year will be the same as the government’s new financial year, which will be 1 October to 30 September. Furthermore, there is an interesting provision under the Draft UTL that allows taxpayers to have a different income year subject to the approval of the Internal Revenue Department and the Ministry of Planning and Finance.
Another note of interest is that the Draft UTL provides a tax amnesty on undisclosed sources of income, with a significant reduction in the tax rates imposed on them. If the taxpayer cannot prove the source of income for the funds used in the purchase of capital assets, the income tax rate on those funds is 3% for the first six months of the income year (i.e. from 1 April 2018 to 30 September 2018) and 5% for the remaining six months (i.e. 1 October 2018 to 31 March 2019). These compare favorably to the current UTL 2017 (effective for the income year 2017-2018), which levies an income tax of 30% on those funds. There is a somewhat lower rate available under the UTL 2017 if the taxpayer is able to prove the source of income for a portion of the funds, with that amount deducted from the total, and income tax imposed only on the remaining portion at progressive rates ranging from 15% to 30%.
Apart from the abovementioned, there are not any major changes from the UTL 2017. The specific goods categories and tax rates remain the same, as do the commercial tax-exempt goods and services, except that in the Draft UTL, raw gold is included as an exempt good.
- Withholding Tax and Personal Income Tax Payment Be Made in Foreign Currency for Non-resident Taxpayers
- May 11, 2023
- Major Changes in the Union Tax Law 2023
- April 25, 2023
- Domestic Payments to Be Made in Myanmar Kyat
- June 7, 2022
- How to Apply for a Certificate of Residence from the Internal Revenue Department of Myanmar?
- April 29, 2022
- Importers/Exporters can request approval to buy USD through the Ministry of Commerce
- April 20, 2022