Employers in Myanmar with five or more employees are required to contribute to the Social Security Board (SSB) for their employees. The employer contribution is 3% of the employee's gross salary. The SSB scheme provides benefits such as healthcare, pensions, and sickness, disability, and employment injury coverage. Employers are responsible for withholding the employee's contribution and remitting both their own and the employee's contributions to the SSB on a monthly basis. Contributions must be paid in Myanmar Kyat (MMK).

Commercial Tax

Employers might be liable for commercial tax on certain business activities or the purchase of specific goods. Commercial tax rates are generally 5%, but can vary depending on the nature of the goods or services.

Important Considerations

Employers need to register with the SSB and obtain an employer registration number. There are specific deadlines for filing social security contributions and commercial tax (if applicable). Late payments or failure to comply with tax obligations can result in penalties.

Additional Notes

Some industries might have additional employer tax contribution requirements. Myanmar's tax system can change, so it's essential to check for updated regulations.

Myanmar operates under a progressive income tax system, meaning the higher an individual's income, the higher the applicable tax rate. The current income tax brackets and rates are available from the Internal Revenue Department (IRD) of Myanmar. Employers are responsible for withholding income tax from their employees' salaries based on IRD-provided tax tables.

Social Security Contributions

Employees in Myanmar, working for employers with five or more employees, are obliged to contribute to the Social Security Board (SSB). The employee contribution rate for social security is 2% of their gross salary. The employer is responsible for withholding the employee's social security contribution from their salary and remitting it to the SSB.

Allowances and Deductions

Employees are entitled to a basic personal allowance to reduce their taxable income. Depending on individual circumstances, allowances might be available for factors like dependents, charitable donations, and certain insurance premiums.

Non-Resident Employees

Non-resident employees working in Myanmar are subject to income tax withholding, usually at a flat rate. The specific rate and rules may depend on the applicable tax treaty, if any.

Additional Notes

Some employment benefits may be subject to income tax. It's also important to note that Myanmar's tax laws can be subject to change.

In Myanmar, the Value Added Tax (VAT) system is referred to as Commercial Tax (CT). This is a consumption-based tax that is imposed on the supply of goods and services. The standard CT rate in Myanmar is 5%.

Services Subject to CT

CT is applicable to a wide range of services provided within Myanmar, as well as services imported into the country. These services include professional services such as legal, accounting, and consulting, technical and repair services, construction and engineering services, transportation and logistics services, telecommunications services, hospitality and tourism services, entertainment and cultural services, and rental and leasing services.

Place of Supply and Tax Liability

The location where a service is considered to be supplied is crucial for determining CT liability. If the service is physically performed in Myanmar, it's generally subject to Myanmar CT. Services used or consumed in Myanmar, even if provided from abroad, can be subject to Myanmar CT. In specific situations, the recipient of a service might be liable for CT under the reverse charge mechanism, which is common for services provided by foreign entities to Myanmar businesses.

VAT Registration

Businesses that supply taxable goods and services with a turnover exceeding the CT registration threshold must register with the Internal Revenue Department (IRD). The current CT registration threshold can be found on the IRD website.

CT Calculation, Filing, and Payment

CT is calculated by applying the applicable rate (generally 5%) to the taxable value of the service. Businesses can generally claim a credit for CT paid on eligible inputs (Input CT) against their CT liability on sales (output CT). CT returns generally need to be filed monthly, and payment made by specific deadlines.

CT Exemptions

Certain services are exempt from CT in Myanmar. These might include essential services like healthcare and education, financial services, and certain agricultural services.

Additional Notes

Specific services, particularly exports, might be zero-rated, allowing businesses to claim back input CT even if they don't charge output CT themselves. Some services have particular CT rules, and the zero-rating scheme can be complex. Myanmar's tax laws and regulations, including those related to CT, are subject to change.

Myanmar offers a variety of tax incentives to stimulate investment and development in certain sectors and regions, under the Myanmar Investment Law (MIL) and other regulations.

Key Areas of Tax Incentives

Special Economic Zones (SEZs): Businesses operating in designated SEZs can benefit from significant advantages, such as income tax exemptions for the first 3 to 7 years, depending on the location, a 50% income tax reduction for the following years, and exemptions from customs duties on the import of certain equipment and materials.

Promoted Sectors: Investments in specific industries or sectors designated as "promoted" may be eligible for tax holidays and other tax benefits. Promoted sectors can include agriculture and agro-processing, manufacturing, infrastructure, and certain types of services like tourism and logistics.

Regional Investment Incentives: Businesses investing in certain less-developed regions of Myanmar may receive additional tax incentives as an encouragement.

Specific Incentives

Income Tax Exemptions/Holidays: Eligible businesses may receive a full or partial exemption from income tax for a specified period, often for the initial years of operation.

Accelerated Depreciation: Businesses might be allowed to depreciate assets over a shorter period for tax purposes, leading to tax deductions faster.

Customs Duty Exemptions: Imports of raw materials, machinery, and equipment for use in eligible businesses can be exempted from customs duties.

Tax Relief on Reinvested Profits: Reduced tax rates may apply to profits reinvested in the business expansion under specified conditions.

Accessing and Applying for Incentives

Many tax incentives in Myanmar require approval from the Myanmar Investment Commission (MIC). Businesses need to carefully understand the eligibility criteria and the application process. Consulting with tax advisors or legal professionals is recommended for successful applications and to navigate Myanmar's tax incentive framework.

Important Considerations

Eligibility: Not all businesses automatically qualify. Eligibility often depends on factors like the type of investment, size, sector, and location.

Changes and Updates: Myanmar's tax laws and incentives are subject to change. Always seek the most updated information.