Union Tax Law 2018 

(2018, Pyidaungsu Hluttaw Law No. 10) 

14^thWaxing Day of Tagu, 1379 

30 March, 2018 

The Pyidaungsu Hluttaw hereby enacts this law. 

Chapter (1) 

Title, date of coming into force and definitions 

1. (a)     This law shall be called the Union Tax Law 2018. 

(b)          This law shall come into force on 1 April 2018. 

(c)           Irrespective of what is provided for in the Special Goods Tax Law, Commercial Tax Law and the Income Tax Law, the provisions with regard to the year, income year and sale/service revenue year shall be set as follows: 

(1)          For state-owned enterprises, the year, income year and sale/service revenue year shall be the fiscal year. 

(2)          For tax payers other than state-owned enterprises, the year, income year and sale/service revenue year shall continue to stretch from 1 April to 31 March.  

2. The following expressions contained in this law shall have the meanings given hereunder- 

(a)           “Tax” means the taxes, tariffs, payments, license fees, permit fees and fines collected for the Union by the Union Government; 

(b)          “Law” means the laws enacted relating to the tax collected for the Union by the Union Government; 

(c)           “Relevant Ministry” means the Union Ministries and the Nay Pyi Taw Council responsible for collecting the taxes to be collected by the Union Government for the Union; 

(d)          “Law Relating to Expenditure under the Budget” means the Law Relating to Expenditure under the Union Budget and the Law Relating to the Additional Budget Allotment, enacted annually; 

(e)           “Tax Rate” means the specified rate at which tax is collected for the Union by the Union Government. 

Chapter 2 

Taxes earmarked for collection 

3. The taxes received by the Union contained in the laws relating to expenditure under the budget are the taxes earmarked for collection in table (1) of this law for the relevant financial year. 

Chapter 3 

Specifying the Tax Rates and reporting 

4. The relevant Ministry shall collect the earmarked taxes at the Tax Rates contained in this law for the types of the taxes. 

5. If the Tax Rates contained in this law should be amended, supplemented or substituted, the Union Government shall submit the matter to the Pyidaungsu Hluttaw so that it is decided after discussion. 

6. (a)  Every three months, the Relevant Ministry shall send the status of collection of the earmarked taxes contained in table (1) of this law to the Budget Department. 

(b)  Every three months, the Budget Department shall compile the lists of tax collection status sent by the Relevant Ministries and submit the compilation to the Union Government through the Ministry of Finance with its opinion and remarks. 

7. Every six months, the Union Government shall report to the Pyidaungsu Hluttaw about the situation of the collection of the earmarked taxes contained in table (1) of this law. 

Chapter 4 

Duties and rights of the Relevant Ministry 

8. The Relevant Ministry shall be responsible for, and monitor, the collection of the earmarked taxes contained in table (1) of this law. 

9. For clear understanding and compliance, the Ministry of Finance shall, if necessary, issue directives without changing the original meanings of the provisions in this law concerning the special goods tax, commercial tax and income tax in this law.

10. The relevant Ministries shall request assistance from the President, Union Government, the Pyidaungsu Hluttaw, Pyithu Hluttaw, Amyotha Hluttaw, Supreme Court, Constitutional Tribunal, Union Election Commission, Union Attorney General, Union Auditor General, Union Civil Service Board, Naypyitaw Council, Union Ministries, Central Bank, Region or State Governments, Head Organizations of the SelfAdministered Divisions and Head Organizations of the Self-Administered Regions in order to obtain required data and support so that tax payers pay in accordance with the law.

Chapter 5 

Special Goods Tax 

11. According to section 6 of the Special Goods Tax Law, the additional schedules to this law are prescribed as follows - Special Goods 

(a) With regard to the special goods contained in the following schedule, the special goods tax shall be paid at the tax rate shown in the column.

(1)          If the tax for the special goods is paid according to the value class and they are produced and sold in the country, the payment shall be based on the higher value among two values: sales price which is estimated and specified by the general director or the management committee of the Internal Revenue Department based on the market price; or the sales price which is shown by the factory, workshop or workplace.

(2)          If the special goods are not classified as goods for which the tax is paid according to the value class and they are produced and sold in the country, the payment shall be based on the value which is specified by the management committee of the Internal Revenue Department.

Remark: When the management committee of the Internal Revenue Department specifies the value of special goods produced and sold in the country, the value of the goods shall be equivalent with the landed costs of imported goods so that the goods can compete with the imported goods in the market.

(3)          If the special goods are imported into the country, the tax shall be paid on the landed costs.  

(b) Any person exporting the following goods shall pay special goods tax at the following tax rates. With the exception of the special goods specified below, 0% special goods tax shall be assessed on the sale when exporting. Special goods tax levied upon purchase, import or production shall be deducted according to the specifications for exporting.  

12. Among the special goods taxable according to the Special Goods Tax Law, special goods tax shall not be assessed on the cooperative sectors and individual sectors with regard to the production of tobacco, cheroots and cigars in the country if total sale proceeds do not exceed kyats 20,000,000 in a financial year. 

13. The terms contained in chapter 5 of this law, except section 1 sub-section (c) (sic!),shall be the same as in the Special Goods Tax Law.     

Chapter (6) 

Commercial Tax 

14. According to section (6) of the Commercial Tax Law, the supplementary schedules of that law are enacted as below- 

Supplementary schedules of the Commercial Tax Law 

(a)           No commercial tax shall be levied for any of the goods specified below.  

(b)          Except for the goods specified in sub-section (a), 5% commercial tax shall be paid on the sales price of goods produced and sold in the country or on the landed costs of imported goods. 5% commercial tax shall be paid on the sales price of goods produced and sold in the country or on the landed costs of imported goods if the goods are included in section (11) of this law.  

(c)           Except for goods and trading activities exempted in accordance with this law, 5% commercial tax shall be paid on the sales price with regard to the following activities, also if they involve special goods specified in section (11): 

(1)          Domestic sale of imported goods 

(2)          Trading 

(d)          Commercial tax shall not be paid on the following services. 

(e)           5% commercial tax shall be levied on the revenue from the remaining domestic services with the exception of services listed in sub-section (d). 

(f)           3% commercial tax shall be levied on the sale proceeds from selling a building after having constructed it in the state. The developers shall be subject to all obligations and benefits contained in the Commercial Tax Law and the Commercial Tax Regulations. 

(g)          1% commercial tax shall be levied on the sale proceeds from selling gold jewelries. 

15. (a)  The Ministry of Planning and Finance, with the approval of the Union Government, can allow exemption or relief from commercial tax in association  with commercial tax matters in the businesses that are operated by local or foreign organizations with donated money, money given as support, or money lent. 

(b)          In the cooperative sector and private sector, no commercial tax shall be levied if the sales proceeds or the service revenue do not exceed the following thresholds - 

(1)          Production and domestic sale of goods which are subject to commercial tax:  sale proceeds up to Ks. 50,000,000 within one financial year; 

(2)          Services subject to commercial tax: Service revenue up to Ks. 50,000,000 within one financial year; 

(3)          Trading: Sale proceeds up to Ks. 50,000,000 within one financial year. 

(4)          Minimum value threshold (deminimis value threshold) set by the Customs Department for goods that are sent and received quickly in accordance with customs procedures. 

16. If any person receives foreign currency for the production and sale of any goods subject to commercial tax, the performance of services subject to commercial tax, or trading, the amount of commercial tax shall be calculated according to the tax rates stipulated in this law and paid in kyats in accordance with the commercial tax regulations. 

17. (a)      8% commercial tax shall be levied on the export of electricity, and 5% on the export of crude oil. 

(b)          With the exception of the goods specified in sub-section (a), 0% commercial tax shall be levied on the export revenue. The commercial tax levied upon purchase or production of the goods may be set off with the commercial tax on the export as prescribed. Notwithstanding the commercial tax provisions, if the commercial tax levied upon export is less than the commercial tax levied upon purchase or production of the goods, a refund may be demanded. However, this shall not apply to goods that are purchased in the country and brought overseas for self-use.  

(c)           The provisions of this section shall not apply to services proceeds and sale proceeds on which no commercial tax is levied. 

18. The definition of the expressions contained in chapter 6 of this law shall be the same as in the Commercial Tax Law, except the terms provided in section (1), sub-section (c) of this law. 

Chapter 7 

Income Tax 

19. (a) No income tax shall be levied on a person whose income does not exceed kyats 4,800,000 in a year. However, the Inland Revenue Department shall issue evidence of exemption for salary income as prescribed if so requested. 

(b)          Nevertheless, if a person has income in excess of Ks. 4,800,000 in a year, income tax shall be paid based on the total of his or her income. 

(c)           Anyone shall be subject to income tax on the total of his or her income after the deduction of the allowances according to Income Tax Law section (6) if  the income from salary within a year is above kyats 4,800,000 or the income from profession, business and other sources of income is as follows- 

(d)          Notwithstanding any other provisions of the Income Tax Law, 10% income tax shall be assessed on the income consisting of the total rental fees from the lease of land, buildings and apartments; the allowances in accordance with section 6 of the Income Tax Law may be deducted. This income shall not be combined with other types of income and no additional assessment shall be made. Income tax shall be levied according to the specified tax rate if [the taxpayers] are state- owned enterprises, enterprises, companies or cooperatives with a permit from the Myanmar Investment Commission. 

(e)           After deducting the allowances according to section 6 of the Income Tax Law, income tax shall be levied on a partnership as prescribed in the schedule of sub-section (c). 

(f)           The income tax rates in this section shall not apply to a person who has [special] income,or a taxpayer who is subject to a specified tax rate with regard to a type of income.   

20. The basic allowance according to clauses (1) and (2), sub-section (a), section 6 of the Income Tax Law is an amount equivalent to 20% of the income for each type of income. However, the total basic allowance for a year shall not exceed kyats 10,000,000. 

21. The income tax shall be assessed on what remains of the total income of the individual according to section 6, sub-section (c) clause (2) after deducting the following allowances contained in section (6), sub-section (a) clause (1) and (2) of the Income Tax Law - 

(a)           Kyats 1,000,000 for each parent with whom the taxpayer lives together 

(b)          Kyats 1,000,000 for a spouse 

(c)           Kyats 500,000 for each child 

22. 10% income tax shall be assessed, in foreign currency, on the total income earned abroad - with the exception of exempted income - by citizens residing abroad before deducting the allowances according to sections 6 and 6 (a) of the Income Tax Law. 

23. (a) With regard to the following types of taxpayers, 25% income tax shall be assessed on the total net profit before deducting the allowances under section 6 of the Income Tax Law. 

(1)          A company which is registered and established in Myanmar according to the Myanmar Companies Law [sic]or the 1950 Special Companies Act. 

(2)          With the exception of the “salary income” heading, other income of a foreigner residing abroad. 

(3)          A business that is operated with a permit of the Myanmar Investment Commission. 

(4)          State-owned enterprises. 

(b)          With the exception of primary cooperative societies, 25% income tax shall be assessed on the  total net profit of other cooperative societies after deducting the allowances under section 6 of the Income Tax Law. 

24. A foreigner residing abroad shall not deduct allowances under section 6 and section 6A. If his/her total income is under the “salary income” heading, the income tax shall be assessed according to the tax rates specified in section (19), sub- section (c). 

25. 30% income tax shall be assessed on income which has escaped assessment before deducting allowances according to sections 6 and 6 (a) of the Income Tax Law. However, if a citizen can show the source of the income used for buying, constructing, acquiring or establishing a new business, or expanding the business, the income tax shall be assessed according to the tax rates specified below with regard to income which has escaped assessment after deducting the income whose source can be shown. No income tax shall be assessed if the sources of all income used can be shown. Assessment according to this sectionshall not apply to the ownership or trade of properties obtained illegally or matters in which action is taken under the Anti-Money Laundering Law. 

26. Income tax shall be assessed on the net profit of primary cooperative societies, which are registered and established under the Cooperative Law, after deduction of the allowances according to section (6) of the Income Tax Law according to the tax rate in section (19) sub-section (c). 

27. If a capital gain, whether in kyats or in foreign currency, has arisen from selling, exchanging or other ways of  transferring and before deducting the allowances according to section 6 and section 6 (a) Income Tax Law - 

(a)  If  the company is participating in Myanmar's oil and gas sector, the income tax shall be assessed according to the tax rate shown next to the profit specified below in the type of currency earned - 

                          Profit                                                                          Income tax rate to be paid 

(1)          Up to equivalent kyats 100 billion                                        40%

(2)          From equivalent kyats 100 billion+1 to 150 billion             45%

(3)          Equivalent kyats 150 billion+1 and above                            50%

(b)           10% income tax shall be assessed, in kyats or foreign currency, on the capital gain of an individual person or a group of persons with the exception of companies participating in Myanmar's oil and gas sector. The tax shall be assessed in the type of currency earned if the taxpayeris a foreigner residing abroad.  

28. No income tax shall be assessed on a capital gain if the total value of the assets sold, exchanged or otherwise transferred within one year is not more than kyats 10,000,000. 

29. Newly established small or mid-sized businesses based on industry and craft with an income not exceeding kyats 10,000,000 during the first three years, including the year of commencement of the business, are exempt from income tax. Income tax shall be assessed on income earned in excess of this amount. 

30. With the exception of capital gains, the income tax shall be levied in kyats on citizens and foreigners residing in the country. Income tax of foreigners residing abroad shall be levied in the type of currency obtained; the income tax shall be calculated in accordance with the provisions of section 8 of the Income Tax Regulations if the income is received in a foreign currency.  

31. (a)      An income or a type of income specified below is exempt from income tax - 

(1)          Up to a total income of kyats 10,000,000 received  once or repeatedly during the income year as an award for an arrest under the Narcotic Drugs and Psychotropic Substances Law; 

(2)          Up to a total income of kyats 10,000,000 received once or repeatedly during the income year as an award for the seizure of illegal materials; 

(3)          Rewards received together with a medal conferred by the state; 

(4)          Income from salary received in foreign currency by a citizen residing abroad; 

(5)          Winning money in a lucky draw of the state lottery; 

(6)          Pensions and gratuities obtained by a civil servant as a consequence of retirement; 

(7)          Rewards by the state for finding antiques. 

(b)          The Ministry of Planning and Finance, with the approval of the Union Government, provides income tax exemption and relief for the following matters: 

(1)          Income tax matters with regard to operations that are performed by domestic and foreign organizations with donated money and money given as support. 

(2)          In order to develop the stock market, income tax matters with regard to public-owned companies that are listed at the Yangon Stock Exchange.  

32. The terms contained in chapter 7 of this law, except section 1 sub-section (c) (sic!), shall be the same as in the Income Tax Law. 

Chapter 8 

Rates of other taxes to be collected 

33. The relevant ministries must manage the rates to be collected, exemptions and reliefs of the following taxes according to the law in force - 

(a)           Excise tax 

(b)          Import license fees and permit fees 

(c)           Myanmar state lottery 

(d)          Fees for vehicles, vehicle licenses, business licenses  

(e)           Court fees and stamp duty 

(f)           Pearl oyster tissue implant tax  

(g)          Fees for a tourism license / hotel and guesthouse license / license for transporting tourists / tour guide license 

(h)          Customs duty 

(i)            Land tax  

(j)            Water tax  

(k)          Embankment tax 

(l)            Forest products tax 

(m)         Mineral extraction tax (not including industrial mineral raw and decorative stones) 

(n)          Fishery tax 

(o)          Oil and natural gas extraction tax  

(p)          Mineral tax and gem stone tax 

(q)          Communication service tax 

(r)           Gratis tax collected on the generation of electricity from water energy  

34. With regard to the extraction of jade, rubies, sapphires and other precious gemstones, producing and trading completed gems and jewelries: 

(a)       Upon the sales of gems or jewelries, either in Myanmar currency or foreign currency-

(1)           Special goods tax shall be charged according to the tax rate of section 11 of this law. 

(2)          According to section 14, sub-section (b) and (c) of this law, the 5% commercial tax shall be charged for importing, producing, selling and trading. 

(3)          The provision of clause (2) shall not apply to non-taxable sales.   

(b)          Income tax shall be charged on the total net income obtained within the assessment year according to the income tax rates under this law.  

Chapter 9 

Miscellaneous 

35. The Union Government may, by notification, form a supporting team for tax collection if necessary. 

36. The Union Government shall do the following to enable the sale of locally manufactured goods in the market and competition with imported goods, the development of long-term benefits for local agriculture and livestock farming which mainly depend on the local manufacturing business, and domestic and foreign investments carried out in the state, without contravening international agreements signed by the state – 

(a)           Engaging in activities so that, with regard to the amount of goods permitted for import and 

customs duty rates, the highest privilege and relief similar to that of countries in the ASEAN region within the framework of the WTO and ASEAN Trade Agreement can be obtained; 

(b)          Making necessary arrangements in conformity with the provisions of the customs law, the provisions of the procedures relating to import/export permission and the fixing of allotments. 

37. (a) The Internal Revenue Department shall inform the public about tax exemptions and tax relief given to taxpayers in accordance with the law, allow them to calculate the tax and the relief, recognize dutiful taxpayers and arrange for suitable rewards. 

(b)          In order to reform the tax system efficiently, the Ministry of Planning and Finance may allow, with the consent of the Union Government, the use of the ordinary budget of the Internal Revenue Department under the Union Budget Law in accordance with the financial procedures for performing the duties prescribed in above sub-section (a).     

(c)           The Ministry of the Planning and Finance can use an amount from the ordinary budget of subsection (b) to reward public service personnel who are responsible for collecting tax in accordance with the financial procedures. 

38. If untaxed special goods are possessed, the informer must, as a reward, be offered 20% of the fine according to section (22) sub-section (c) of the Special Goods Tax Law, and the group making the arrest must be offered 30%. The informer must not be identified except in a government case. 

39. With regard to the change of the financial year, the relevant Ministry may, with the consent of the Union Government and irrespective of the relevant law, issue required procedures for smooth operation during the transition period. 

40. With regard to the provisions on the year, income year and sale/service revenue year in the Special Goods Tax Law, Commercial Tax Law and Income Tax Law, the Ministry of Planning and Finance shall arrange that all tax payers including state-owned enterprises are in compliance from 1 October 2019. 

I sign under the constitution of the Republic of the Union of Myanmar. 

                                                                                                                                  Win Myint 

                                                                                                                                   President

                                                                           The Republic of the Union of Myanmar 

(Table -1) 

Taxes of the Union originally earmarked for collection