In Brunei Darussalam, employers have several tax responsibilities.

Corporate Income Tax (CIT)

The corporate income tax rate in Brunei is 18.5%. The first BND 100,000 of assessable income is taxed at 18.5%, and the next BND 150,000 of assessable income is taxed at 50% of the 18.5% rate. Companies registered in Brunei or overseas with income derived from Brunei are subject to CIT.

Employee Trust Funds (TAP & SCP)

Employers must contribute to the Tabung Amanah Pekerja (TAP) and the Supplemental Contributory Pension (SCP). For the TAP, a mandatory retirement savings scheme, employers must contribute at least 5% of an employee's basic salary. For the SCP, an additional pension scheme, employers must contribute 3.5% of an employee's basic salary. There are maximum monthly contribution amounts for both TAP and SCP schemes. These schemes generally do not apply to foreign nationals who are not permanent residents of Brunei.

Other Potential Employer Obligations

Employers may need to withhold taxes from payments to non-residents providing services in Brunei. Owners of properties may be subject to property taxes. Businesses engaged in the import or export of goods may be subject to customs duties.

Important Notes

Tax regulations are subject to change. Employers should consult the Brunei Ministry of Finance and Economy and/or a qualified tax advisor for the most up-to-date and accurate information. Employers should register with relevant tax authorities in Brunei. Deadlines for filing and payment of taxes must be strictly adhered to.

In Brunei Darussalam, the taxation system is unique, focusing more on social security and retirement contributions rather than direct income tax.

Tabung Amanah Pekerja (TAP)

This is a government-mandated employee provident fund, serving as a form of retirement savings. Both employees and employers contribute a minimum of 5% of the employee's basic salary.

Supplemental Contributory Pension (SCP)

The SCP is a supplemental pension scheme enhancing retirement savings. Both employees and employers contribute 3.5% of the employee's basic salary.

Key Points to Remember

There are no personal income tax deductions in Brunei Darussalam. Expatriate workers might be subject to additional regulations regarding TAP and SCP contributions.

Brunei Darussalam currently does not have a Value-Added Tax (VAT) or a similar broad-based consumption tax.

Potential Future VAT Introduction

While there's no VAT presently, the potential for introducing VAT in the future exists. It is recommended to monitor the official website of the Ministry of Finance and Economy for announcements and updates.

Import Duties

Even without VAT, imported goods (and potentially some imported services) might be subject to customs duties or other import taxes.

Specific Situations

If you have a specific scenario related to providing or receiving services in Brunei Darussalam, here's how to find relevant information:

Type of Service

The specific nature of the service is crucial in determining any potential tax implications, even in the absence of VAT.

Cross-border Services

Providing services to Brunei from abroad or vice versa may have tax implications. Specific rules might apply depending on the services involved.

Companies engaged in promoted activities or manufacturing specific pioneer products may be eligible for "Pioneer Status," offering corporate tax exemptions for a specified period. The Investment Tax Allowance (ITA) provides tax deductions for qualifying capital investments in specific sectors or activities.

General Incentives

• Pioneer Status Incentives: Corporate tax exemptions for a specified period for companies engaged in promoted activities or manufacturing specific pioneer products.
• Investment Tax Allowance (ITA): Tax deductions for qualifying capital investments in specific sectors or activities.

Sector-Specific Incentives

• Industry-Specific Incentives: Various industries, including high-technology, manufacturing, export-oriented businesses, tourism, and halal production, may offer specific incentives or tax breaks.
• Small and Medium Enterprises (SMEs): SMEs may benefit from special schemes such as tax reductions, financing support, and capability development programs.

Regional Incentives

• Brunei Economic Development Board (BEDB): BEDB initiatives promote investment in designated economic zones or industrial parks, potentially offering tax incentives and other benefits.

Finding the Right Incentives

The main resource for tax incentives is the Ministry of Finance and Economy. The Brunei Economic Development Board (BEDB) provides information on investment opportunities, incentives, and support programs for businesses. Darussalam Enterprise (DARe) fosters entrepreneurship and SME development, offering guidance on potential incentives.

Important Considerations

• Eligibility Criteria: Incentives typically have strict eligibility requirements based on industry, investment amount, job creation, export activity, or other factors.
• Application Process: Businesses often need to apply and obtain approvals from relevant agencies to benefit from tax incentives.
• Changes to Incentives: Tax laws and incentives in Brunei Darussalam can be subject to change, so it's crucial to obtain up-to-date information from official sources or professional tax advisors.