2018 28 September

Myanmar Tax Alert: Myanmar Passes The 2018-2019 Union Tax Law


On 25 September 2018, the Union Parliament (“Pyidaungsu Hluttaw”) enacted the 2018-2019 Union Tax Law (“2018-2019 UTL”) which provides clarity on the transition period regarding the change in the tax year of reporting along with tax rates and exemptions applicable to certain goods and services in Myanmar.

For State-owned enterprises (“SOEs”), the 2018-2019 UTL is effective from 1 October 2018. For other taxpayers (i.e., private companies and businesses), the provisions of this new law will only be effective between 1 April 2019 to September 2019. At present, private companies and businesses will still be covered by the 2018 UTL (effective since 1 April 2018) until 31 March 2019.

We highlight below the major changes in the 2018-2019 UTL:

1.       Clarification of the Tax Year for 2018-2019

Under the 2018-2019 UTL, the tax year for SOEs remains the same from 1 October to 30 September of the following year, which is aligned with Myanmar’s new budget year. Meanwhile, the tax year for private companies and businesses remains the same (from 1 April to 31 March of the following year).


(a)    There is no mention in the 2018-2019 UTL with respect to the tax year for banks and financial institutions. Note that the Internal Revenue Department (“IRD”) previously issued an announcement (under LTO letter No. 5274 dated 9 May 2018) stating that banks and financial institutions must adopt the new financial year for reporting purposes (i.e. starting 1 October 2018), in order to come into alignment with the Central Bank of Myanmar’s (“CBM”) new reporting requirements. We understand however, that most banks and financial institutions under the CBM also follow this period of reporting.

(b)   There is a special provision in the 2018-2019 UTL stating that “39(a) Provisions under this law will be effective from 1 April 2019 to 30 September for all the other tax payers except for State-owned enterprises.” This provision could be interpreted that private companies and businesses will eventually follow a six-month transition period from 1 April 2019 to 30 September 2019, and they will be required to adopt the new financial year beginning 1 October 2019.

2.       Changes to Special Goods Tax (“SGT”)

The 2018-2019 UTL increased the SGT rates for cigarettes, cheroots, and alcohol. For cigarettes, the sales price tier was increased by MMK 100 per tier along with an increase in SGT rates per tier (ranging from MMK 6 to MMK 21 per cigarette). The same also applies to alcohol where the liter value tier increased along with the increase in SGT rates per tier (ranging from MMK 122 to 60% per liter value). From this, it is expected that cigarettes, cheroots, and alcohol will become more expensive due to the increased level of SGT.

In addition, diamonds and emeralds are excluded from the list of special goods that are subject to SGT.

Under 2018 UTL Under 2018-2019 ITL
Various kinds of cigarettes If the sales price per pack of 20 cigarettes is: If the sales price per pack of 20 cigarettes is:
Sales price tier in MMK SGT in MMK Sales tier in MMK SGT in MMK
Up to 500 4  per cigarette Up to 600 per cigarette
From 501 to 700 9 per cigarette From 601 to 800 14 per cigarette
From 701 to 900 13 per cigarette From 801 to 1,000 19 per cigarette
From 901 and above 16 per cigarette From 1,001 and above 21 per cigarette
Cheroots MMK 0.25 (25 cents) per item

MMK 0.50 (50 cents) per item

Various kinds of alcohols If the liter value is: If the liter value is:
Liter value tier in MMK SGT in MMK Liter value tier in MMK SGT in MMK
Up to 750 91 per liter Up to 1,000     122 per liter
From 751 to 1,500 274 per liter  From 1,001 to 2,000   366 per liter
From 1,501 to 2,250 457 per liter  From 2,001 to 3,000  609 per liter
From 2,251 to 3,000 650 per liter  From 3,001 to 4,000  853 per liter
From 3,001 to 3,750 838 per liter  From 4,001 to 5,000  1,097 per liter
From 3,751 to 4,500 1,006 per liter  From 5,001 to 6,000  1,341 per liter
From 4,501 to 6,000 1,280 per liter  From 6,001 to 8,000   1,706 per liter
From 6,001 to 7,500 1,646 per liter  From 8,001 to 10,000  2,194 per liter
From 7,501 to 9,000 2,011 per liter  From 10,001 to 12,000  2,681 per liter
From 9,001 to 10,500 2,377 per liter  From 12,001 to 14,000   3,169 per liter
From 10,501 to 13,500 2,925 per liter  From 14,001 to 17,000  3,778 per liter
From 13,501 to 16,500 3,657 per liter  From 17,001 to 20,000  4,509 per liter
From 16,501 to 19,500 4,388 per liter  From 20,001 to 23,000   5,241 per liter
From 19,501 to 22,500 5,119 per liter  From 23,001 to 26,000  5,972 per liter
From 22,501 to 26,000 5,911 per liter  From 26,001 to 29,000   6,703 per liter
From 26,001 and above 60% of one liter’s value  From 29,001 and above  60% of one liter’s value


3.       Changes in Commercial Tax (“CT”)

There are a few changes in CT, more specifically with regard to the grouping of CT exempt goods and services. Per the 2018 UTL, there are 86 goods and 30 services which are exempt from CT. However, per the 2018-2019 UTL, there are now 42 goods (which are the general classifications of the initially classified 86 goods) and 31 services exempt from CT. The new additions to the CT-exempt list are:

  • Private, small-scale, electric power service providers that produce and distribute electricity to regions not connected to the National Grid (off-grid);
  • Raw material for soap powder and raw material for soap and raw soap; and
  • Tragacanth (a kind of natural gum).

In the case of CT exemptions on goods and services used by diplomats and non-diplomatic staff of embassies and consulates, the 2018-2019 UTL qualified that the reciprocity must be approved by the Ministry of Planning and Finance through a notification that is proposed by the Ministry of Foreign Affairs (with the approval of the Union Government).

In addition, the 2018-2019 UTL clarifies that gold jewellery is subject to 1% CT on the sales proceeds or the landed cost in the case of importation. Previously, the 2018 UTL did not provide clarification on the CT rate for the importation of gold jewellery.

4.       Changes to Income Tax

There are minimal changes in the income tax provisions under the 2018-2019 UTL. The changes include the following:

  • Removal of the threshold (previously at MMK 10 million) for tax-exempt income received as an award for the seizure of illegal materials and drug arrests; and
  • Removal of the qualification that pensions and gratuities after retirement must be for government employees. The 2018-2019 UTL only mentions “pension, money transformed from pension, and gratuity after retirement.”

In addition, the 2018-2019 UTL includes a separate provision that the “tax collected from the holders of permit to operate and use vacant, fallow or virgin land” will be part of “taxes earmarked for collection” by the Myanmar Government.

DFDL Contacts

Jack Sheehan
Head of Regional Tax Practice

Diberjohn Balinas
Senior Tax Manager,

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.

Read more Legal & Tax Updates

Read more about DFDL

Read more about DFDL Myanmar