Income tax in Myanmar
Taxation Researcher | October 08, 2020
Residents are taxed on their worldwide income. Married couples are assessed and taxed separately.
The tax year is from 01 October of the current year to 30September of the succeeding year. The tax year 2019-2020 is from 01 October 2019 up to 30 September 2020. The tax year 2020-2021 is from 01 October 2020 up to 30September 2021.
Income is categorized as (1) income from salary, (2) a profession, (3) business, (4) property, (5) capital gains, and (6) other sources and undisclosed sources. Income from salary and capital gains are assessed separately from other income categories.
Income tax is levied on total income, after deduction of allowable expenditure and depreciation where applicable.
INCOME TAX 2018-2020
|TAXABLE INCOME, MMK US$|
|Up to 2 million (US$1,322)|
|2 million- 5 million (US$3,305)|
|5 million - 10 million (US$6,609)|
|10 million - 20 million (US$13,219)|
|20 million - 30 million (US$19,828)|
|Over 30 million (US$19,828)|
Employees are granted a relief for 20% of their income, subject to a cap of MMK10 million (US$6,609).
Resident taxpayers are entitled to the following allowances:
- spouse allowance: MKKK1 million (US$661)
- parent allowance: MKKK1 million (US$661)
- children allowance for children below 18 years of age: MMK500,000 (US$331)
Taxable rental income is computed by deducting income-generating expenses from the gross income. However, when it comes to income from immovable property, no depreciation allowance can be deducted.
Stamp Duty on Rental Income
Stamp duty is levied on rental income, and the applicable rate depends on the rental period.
STAMP DUTY ON RENTAL INCOME
|Up 3 years|
|1 year – 3 years|
CAPITAL GAINS TAX
Capital gains realized earned by residents from the sale of immovable property are taxed at a flat rate of 10%. Taxable capital gains are computed by deducting acquisition costs and transaction costs from the sales proceeds.
Property taxes are levied on the property´s annual value or the property´s anticipated gross rent if it is leased unfurnished. The property´s annual value is determined by the local authorities where the property is located.
|General Tax||20% of annual value|
|Lighting Tax||5% of annual value|
|Water Tax||12% of annual value|
|Conservancy Tax||15% of annual value|
Income earned by resident companies is generally subject to corporate income tax at a flat rate of 25%. Income-generating expenses are deductible when calculating taxable income.
CAPITAL GAINS TAX
Capital gains earned by nonresident companies are generally subject to corporate income tax at a flat rate of 25%. Taxable capital gains are calculated by deducting the following from the sales proceeds: acquisition costs and additional expenses, and any allowable tax deduction.