2018 15 February

Myanmar Tax Alert: Updates on Online Payment System and Advance Income Tax on Exports

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Myanmar Internal Revenue Department (IRD) to implement online tax payment system starting February 2018

The Myanmar IRD will implement an online payment system this month through which taxpayers can easily submit their due taxes. This online system aims to reduce delays resulting from manual filing and the clearing of checks with local banks and to streamline the tax payment procedures with the Myanmar Economic Bank.
 
The online payment system will apply to taxpayers registered under the Large Taxpayers Office (“LTO”), the Medium Taxpayers Office (“MTO”), and those registered under township tax offices. To register:

  1. The taxpayer must have a Myanmar kyat account with at least one local bank (e.g. KBZ, AYA, CB Bank, etc.).
  2. The taxpayer must notify the relevant tax office and prepare the “Registration Form for online tax payment” (Registration Form) that will be provided.
  3. Once registration with the tax office is complete, taxpayers must then send the Registration Form to their local bank.
  4. If there are changes to the particulars provided in the Registration Form, the taxpayer must notify the tax office and send a new form to the local bank.

Currently, registration is optional as the system is still at the pilot stage.
 
The taxes covered by the online payment system are: Income Tax (Corporate, Capital Gains, and Personal), Commercial Tax, Special Goods Tax, and Withholding Tax. Stamp duty is not covered by the online payment system.
 
We understand that the IRD intends to issue a separate notification or directive in the near future laying down guidelines regarding the remittance procedures for the online payment of tax (e.g. use of the Remittance Form and using the Customer Credit Transfer Function on the CBM-Net System).

Myanmar IRD exempts taxpayers under LTO and MTO1 from paying 2% advance income tax on exports

The Myanmar IRD issued a letter addressed to the Director General of the Ministry of Customs stating that taxpayers under the LTO and MTO1 are no longer required to pay 2% advance income tax on exports, effective from 2 January 2018.
 
In the letter, the IRD acknowledged the level of compliance and significant tax payments being made by taxpayers under the LTO and MTO1. Therefore, in order to aid their business operations in Myanmar, the IRD, with approval from the Economic Committee Union Government, granted the exemption on payment of advance income tax for exports.

Taxpayers under the LTO and MTO1 are therefore now exempt from the payment of this tax on exports. Nevertheless, they must still pay 2% advance income tax on imports unless the goods imported are included in the exempt list under Notification 17/2016 issued by the Ministry of Finance.
 
This exemption does not extend to taxpayers under the MTO2 and MTO3 who must continue paying the 2% advance income tax on both the import and export of goods.

The DFDL team, as always, stands ready to answer any questions that you may have on this and other tax issues of concern. For more information, please contact info@dfdl.com.

The information provided in this email 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.

DFDL Contact


Jack Sheehan
Partner,
Head of Regional Tax Practice
jack.sheehan@dfdl.com


Diberjohn Balinas
Tax Manager, Myanmar
diberjohn.balinas@dfdl.com