Deadline for Myanmar Stamp Duty Amnesty fast approaching

Taxpayers have until 31 March 2016 to take advantage of the Ministry of Finance and Revenue’s (MoFR) amnesty on stamp duty penalties. We encourage all our clients to act now in order to avoid steep penalties for late payments.

Taxpayers have until 31 March 2016 to take advantage of the Ministry of Finance and Revenue’s (MoFR) amnesty on stamp duty penalties. We encourage all our clients to act now in order to avoid steep penalties for late payments.

What are Stamp Duties? How can you benefit from the amnesty?

Under the Myanmar Stamp Duty Law, stamp duty must be paid on documents executed in Myanmar, as well as those executed outside Myanmar, but have a Myanmar subject matter. Stamp duty is due before or upon execution of a document within Myanmar, and, if the document is executed outside, the deadline is three months upon bringing the document into the country.

The scope of the Stamp Duty Law is quite comprehensive and covers, for example, all lease agreements, service agreements, conveyances of property, loans, mortgage-deeds, pledges, transfers of shares, insurance agreements, bonds, promissory notes or other negotiable instruments, among others. The duties vary from a fixed amount to an ad valorem duty of 1.5%, 3%, or in some cases up to 5% of the instrument’s value. The late filing penalty is 10 times the value of the stamp duty due.

According to an announcement by the MoFR on 16 January 2016, the tax authority will continue to collect stamp duties, but will waive this penalty until 31 March 2016.  All relevant documents are covered by the amnesty program, including those signed with or among government ministries, departments, region/state governments, commercial enterprises and private companies of the Union of Myanmar.

What must you do?

The amnesty is an opportunity for taxpayers to settle stamp duty liabilities without fear of penalties being imposed.

We suggest that taxpayers:

• Perform an internal check to see if there are any documents that have been executed, but have not yet been assessed for stamp duties.
• Submit the documents to the tax authority for assessment. If the submission is made before 31 March 2016, the appropriate stamp duties will still be due, but the penalty will be waived. If you miss the deadline, the instrument will be assessed for the appropriate stamp duty and a penalty of 10 times the stamp duty will be payable.
• Endeavor to submit documents as early as possible to allow sufficient time to discuss with the tax officers as to the nature of your instrument and the appropriate rate.

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