Myanmar Introduces Advance Income Tax On International Trade

by Mary Swire, Tax-News.com, Hong Kong

13 June 2013

In a notification to both individual and corporate international traders, Myanmar's Internal Revenue Department (IRD) has released details of a new 2 percent advance income tax on nearly all imported and exported goods, commencing on June 14, 2013.

Both importers and exporters must pay an advance income tax assessment of 2 percent on the value of goods for import or export, as the case may be. Imports will be subject to tax on their customs-assessed value, while, if the export is in foreign currency, the value of the goods will be converted using the official foreign exchange rate on the date of export, and the tax paid in the local Kyat currency.

The IRD said that the system is being introduced so as to improve tax compliance and so that traders are able to pay their income taxes in instalments (instead of in one amount following assessment after completion of their annual tax returns). As an advance income tax, the tax can therefore be offset in final assessment and any refund due paid by the IRD.

The goods not subject to the new tax include construction and raw materials imported under a Myanmar Investment Commission permit, materials imported under the "cutting, making and packaging" activity common in the garment and footwear industries, or goods imported under a drawback facility or imported temporarily.

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