What is covered under royalty payment in Myanmar?

The Internal Revenue Department issued Public Ruling 1/2021 (“PR 1/2021”) on 17 June 2021, clarifying the definition of the right to use with regard to licenses, trademarks, and patent rights that fall under the payment category of royalties.

The term “right to use” means:

1. Using or the right to use any patent rights of literature, works of art, or scientific inventions, including movies and films or tapes, to be broadcast on radio, television, or the internet
2. Using or the right to use, or capturing or the right to capture, videos or audio or both videos and audio transmitted by satellite, cable, optical fiber, or similar technology when broadcasting on television, radio, or the internet
3. Using or the right to use any patent, invention, trademark, design or model, plan, secret recipe or process, or other similar equipment or rights
4. Using or the right to use any industrial, commercial, or scientific equipment
5. Using or the right to use any information related to industrial, commercial, or scientific testing or experiments
6. Support provided as a way to use or enjoy the equipment or rights described in clauses (1) to (5) above

According to the Withholding Tax (“WHT”) notification 47/2018, WHT rates for royalty payments for the right to use licenses, trademarks, and patent rights, etc. by residents and non-residents are at 10% and 15%, respectively. Therefore, payments under clauses (1) to (5) will be covered under the royalty payment category and will be subject to 10% WHT for payments to residents and 15% WHT for payments to non-residents.