Accounting and tax

1. For tax purposes, an individual is considered a resident of Myanmar if he has resided there for no less than 183 days. Foreign employees operating under the FIL are usually treated as residents. Companies incorporated in Myanmar are also considered to be residents even though shares are held by foreign investors. Associations of persons will also be deemed to be residents if the control, management, and decision-making entities are located entirely in Myanmar;
2. A resident foreigner is subject to tax on all worldwide income, while non-residents are subject to taxes on income generated only within Myanmar. Dividends and share profits, however, are not part of assessable income, while expenses and depreciation can be deducted from gross income before assessment. Capital, personal, or domestic expenses, however, cannot be deducted from income;
3. Myanmar tax rates vary per individual. For foreigners engaged in a State-sponsored activity, 20% applies before deductions, while resident foreigners in enterprises under FIL are subject to a 10% levy. Resident foreigners who do not fall under the previous two categories are subjected to a 15% flat rate. For non-residents on the other hand, a rate of 35% applies to income generated within Myanmar;
4. For Myanmar corporate entities, a flat business tax rate of 22% is applicable to those operating under FIL and MCA. If a company falls under neither category, it is subject to a progressive rate which starts from 3% and rises to 50%;
5. The withholding tax rates in Myanmar range from 3.5% to 15% depending on the type of income being paid, eg interest, royalties, and payments under contract with various entities. There is no withholding tax on dividends;
6. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.