On 15 May 2020, the Ministry of Planning, Finance and Industry (“MOPFI”) issued Notification 56/2020 amending the Commercial Tax (“CT”) Regulations in Myanmar. This Notification removes the input CT qualification on fixed assets/capital purchases under Section 42(d) of the CT Regulations.
Section 42(d) of the CT Regulations provides that “Input CT paid for the purchase or construction of fixed assets and capital assets cannot be offset against output CT.”
Prior to this amendment, taxpayers were not allowed to offset the CT paid on fixed assets and capital purchases against their output CT on sales of goods or provision of services. The CT paid on these purchases was normally capitalized as part of the cost of an asset and subject to depreciation on a yearly basis. However, under this latest amendment to the CT Regulations, taxpayers can offset the CT paid on fixed assets and capital purchases against their output CT throughout the year.
This Notification is effective from 1 October 2019 or the beginning of fiscal year 2019-2020.
In case you have any comments or questions on the matter, please let us know and we will be glad to assist.
The information provided here is for information purposes only, and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
Contacts
Partner & Head of the Regional Tax Practice Group
Senior Tax Manager, Myanmar
