Tax Compliance Requirements

Tax exemptions or incentives may apply depending on a number of factors, including the following:
MIC may with the approval of the Government grant income tax exemptions in Zone (1) (less developed regions) for 7 years; in Zone (2) (moderate developed regions) for 5 years; in Zone (3) (adequate developed regions) for 3 years.

1. Myanmar Investment Commission incentives

Prohibited investment activities may include ; An investment permit issued by the MIC for qualified projects provides a number of advantages that have been specified in the Myanmar Investment Law 2016, as outlined in
No. Advantage Description
1 CIT holiday Depending on the investment zone, the CIT holiday period can be 7 years (Zone 1), 5 years (Zone 2) and 3 years (Zone 3).
2 Tax-free profit if reinvested Profit which is reinvested within one year is exempt from CIT, including the profit reinvested in another similar type of business
3 Depreciation Accelerated depreciation may be allowed to start from the date of commercial operation
4 Equal income tax rate Income tax rates on foreigners are the same as on citizens
5 R&D deduction Right to deduct R&D costs from assessable income
6 Exemption for imports of machinery, equipment, materials, spare parts, construction materials that cannot be purchased locally Exemption from customs duty and other local taxes during the construction period and expansion period of the project
7 Exemption for raw materials and semi- finished goods Exempt from customs duty and other local taxes for businesses which export their entire production
8 Refund of tax and duty in case of export When goods are exported, refund of customs duty and other local taxes paid on the import of the raw materials and semi-finished goods of those goods that are exported

2. Special Economic Zone incentives

There are two main zones under the Special Economic Zone (“SEZ”) Law, and businesses investing in an SEZ are provided with a number of advantages, as listed in the chart
Exemptions & Relief Free/Exempt Zone# Promotion Zone#
Tax holiday 7 years of CIT exemption from the start of commercial operations 5 years of CIT exemption from the start of commercial operations
CIT rate reduction of 50% for the following 5-year period CIT rate reduction of 50% for the second 5-year period
50% of the profits exempted for the next 5-year period (requires reinvestment of profits within 1 year) 50% of the profits exempted for the third 5-year period (requires reinvestment of profits within 1 year)
Customs duty and other taxes Exemption from customs duty and other taxes on imports of: raw materials to be used in production; machinery and spare parts; construction materials to construct a factory, warehouse, and offices; and vehicles and other equipment required for the business Exemption from customs duty and other taxes for 5 years and a 50% reduction for another 5 years on imports of: equipment and spare parts to be used in the business (and not for trading purposes); construction materials to construct a factory, and warehouse; vehicles and other equipment required for the business
  Can apply for a refund of the customs duty and other taxes paid on the import of raw materials, provided semi- finished or finished goods are exported
Carry forward and set off of losses Can be carried forward for 5 years Can be carried forward for 5 years
# Free/Exempt Zone is for export and Promotion Zone is for domestic sales orientated business.

The number of goods listed as exempt from commercial tax increased to 87 in the new Union Tax Law (UTL) from the previous 86 items listed. (Union Tax Law 2017, LEGAL ALERT (Mar. 7, 2017).
Added to the UTL as being exempt from commercial tax include goods and services are;

Commercial Tax Exempted Goods

No. CT Exempted Goods
1 Paddy, rice, broken rice, fine bran, coarse bran, husk
2 Fine and coarse wheat bran
3 Various types of maize and their flour
4 Varieties of whole and split pulses and beans, and their flour, bran and husks
5 Groundnuts, shelled and unshelled
6 Sesame seeds, Niger seeds
7 Mustard seeds, sunflower seeds, tamarind seeds, cotton seeds
8 Oil palm
9 Cotton (assorted)
10 Jute and other fibers
11 Onions, garlic
12 Potatoes
13 Tapioca, tapioca powder
14 Spices (leaves, fruit, seeds, bark) and spice mixtures (masala)
15 Fresh assorted fruit
16 Vegetables
17 Sugarcane and sugar, jaggery and brown slab sugar
18 Mulberry leaves
19 Medicinal herbal plants
20 Agricultural products not specified elsewhere such as thatch, reeds, nipa palm, taung htan, cardamom, wa oo, Thanakha
21 Firewood, bamboo
22 Live animals, fish and prawns
23 Silk cocoons
24 Raw and processed cane
25 Honey, beeswax
26 Sealing wax
27 Groundnut cakes, sesame cakes, cotton seed cakes, rice bran cakes, etc.
28 Bleaching substances (only Hydrochloride used in bleaching)
29 Coir yarn and coconut shell charcoal
30 Varieties of pickled or dried tea leaves
31 Assorted stamps (including revenue stamps)
32 Sealing wax and stamps
33 Slate, slate pencils and chalk
34 Varieties of fish sauce (ngan-pya-ye)
35 Groundnut oil, sesame oil
36 Fresh fish, fresh prawns and fresh meat
37 Various types of dried fish and dried prawns
38 Various types of pickled fish and pickled prawns
39 Coarse fish and prawn powder
40 Various types of milk, condensed milk, evaporated milk and milk powder
41 Soy milk
42 Chili, chili powder
43 Turmeric and turmeric powder
44 Ginger
45 Various types of fish paste (ngapi)
46 Ripe tamarind
47 National flag
48 Rosaries (except for rosaries made with precious gemstones)
49 Various types of rulers, erasers, sharpeners
50 Fuel block as an alternative to firewood
51 Coconut oil (not palm oil)
52 Various types of eggs (chicken, duck, etc.)
53 Pumpkin seeds, melon seeds, cashew nuts
54 Religious clothes (robes, etc.)
55 Oil dregs
56 Various types of salt
57 Rubber
58 Areca nuts
59 Chemical fertilizers
60 Insecticides, weed killers used for agriculture, disinfectant sprays for animal ranch
61 Agricultural and livestock tools, machinery, equipment and their spare parts, four-wheel tractors
62 Animal, fish and prawn food (raw and finished products)
63 Medicine and vaccine used for animal, fish and prawn
64 Different forms of semen for animal artificial insemination
65 Solar panels, solar charger controllers and solar inverters
66 X-ray film, X-ray paraphernalia and other medical equipment which are  imported or produced by hospitals and clinics for their own use
67 Medical cotton, cloth, bandages, hospital outfits and miscellaneous items which are imported or produced by hospitals and clinics for their own use
68 Various types of household medicine and other pharmaceuticals and various types of traditional medicine (medicines specified by notification of the Ministry of Planning and Finance)
69 Raw materials for medicine including raw materials for traditional medicine
70 Various types of school text books, technical reference books that can be used in universities and colleges, exercise books and drawing books, and paper for the production of such books and all sorts of pencils
71 Graphite used for the production of pencils
72 Condoms
73 Weapons, vehicles, machinery, materials, equipment and their spare parts used by defense and security forces of the Union
74 Various types of gunpowder, dynamite and any other materials for civilian purposes
75 Quality crop seeds and nursery plants
76 Fire engines and hearses
77 Goods to be sold in foreign currency at duty-free shops
78 Goods to be used by foreign embassies or consulates and members and staff thereof under the principle of reciprocity
79 Goods for the armed forces bought using the allotted budget of the Ministry of Defense
80 Raw materials or sub-assemblies or packaging materials for finished goods which were sent by clients from abroad for the purpose of producing any finished goods on a Contract Manufacturing Process (CMP) basis
81 Fuel sold to foreign embassies, UN organizations and foreign diplomats by the Ministry of Electricity and Energy
82 Goods purchased with cash donations or contributions given to the State by local or foreign benefactors
83 Jet fuel sold to be used for international flights
84 Airplane and helicopter engines, equipment, accessories and parts thereof
85 Goods exempt from taxes as stated by the Pyidaungsu Hluttaw because of State requirements
86 Goods imported under temporary admission or on a drawback basis subject to customs procedures
87 Raw gemstones and finished gemstones of jade, ruby, sapphire sold at local Myanmar Gems Emporiums held by the Government

Commercial Tax Exempted Services

No. CT Exempted Services
1 Parking lot rental services
2 Life insurance services
3 Microfinance services
4 Healthcare services except cosmetic surgery
5 Education services
6 Haulage services (transport services by train, car, vessel, airplane and crane except transporting through pipelines)
7 Capital market services
8 Banking and financial services provided with the permission of the Central Bank of Myanmar
9 Customs clearance services
10 Catering equipment rental
11 Services provided on a Contract Manufacturing Process (CMP) basis
12 Funeral services
13 Childcare services
14 Traditional massage and massage by the blind
15 Moving services
16 Toll collection services
17 Animal healthcare services
18 Public toilet entrance fee collection
19 Overseas air passenger transportation
20 Culture and arts services
21 Public transport except for domestic air passengers transportation services
22 License fees paid to government organizations in order to obtain any license
23 Publications by the Security Press of the Ministry of Defense
24 Services to be used by foreign embassies or consulates and members and staff thereof who are not diplomats under the principle of reciprocity
25 Services received with contributions by local and foreign organizations to the Union
26 Services as may be exempt from taxes by the Pyidaungsu Hluttaw because of State requirements
27 Interdepartmental services between the President’s Office, Union Government Office, Pyidaungsu Hluttaw Office, Pyithu Hluttaw Office, Amyotha Hluttaw Office, Union Supreme Court Office, Constitutional Tribunal Office, Union Election Commission Office, Union Attorney General Office, Union Auditor General Office, Union Civil Service Board Office, Nay Pyi Taw Council Office, Union Ministries, Central Bank of Myanmar, Social Security Board, Region or State Government Offices, government departments, etc. (except services provided to state-owned economic enterprises by such offices or vice versa)
28 Lottery business
29 Industrial agriculture services

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