In Myanmar, a Union Tax Law is enacted each year to announce the rates of tax set out in the Income Tax Law 1974, the Commercial Tax Law 1990, and the Special Goods Tax Law 2016. The Union Tax Law 2023 (UTL 2023) came into force on April 1, 2023. It sets the rates of special goods tax (SGT), income tax (IT), and commercial tax (CT) for the period of April 1, 2023, to March 31, 2024, and exempts certain goods and services from these taxes.
The key changes implemented by the UTL 2023 are summarized below.
Special Goods Tax
The UTL 2023 exempts battery electric vehicles (BEVs) from SGT. At the same time, it increases the rate of SGT on imported liquor. Previously, the rate of SGT ranged from 190 MMK per liter to 60 percent of the per-liter price of imported liquor in the previous fiscal year. The UTL 2023 raises the minimum rate to 209 MMK per liter while leaving the upper rate unchanged.
Commercial Tax and Customs Tariffs
BEVs imported into Myanmar were made exempt from CT under the Law Amending the Union Tax Law 2022. The UTL 2023 extends the exemption until the end of the 2023–24 fiscal year, along with two- and three-wheeler BEVs, BEV batteries, and related parts for specific use in BEVs. The CT exemption for battery charging services for BEVs, also introduced in 2022, has similarly been extended.
Following enactment of the UTL 2023, the Ministry of Planning and Finance (MOPF) issued Notification No. 31/2023, reducing to zero the customs tariffs on imported BEVs, including those imported completely built up (CBU), completely knocked down (CKD), or semi-knocked down (SKD). The tariffs on spare parts and materials for BEVs have also been reduced to zero.
In addition to exempting BEVs from SGT and CT, the UTL 2023 exempts certain goods related to solar modules and panels from CT. The MOPF also announced customs tariff exemptions for these same goods. The exempted goods include many types of photovoltaic panels, controllers, inverters, battery boxes, and other equipment. Related materials will only be exempted when imported together with photovoltaic solar controllers and batteries.
Income Tax
The UTL 2023 grants certain IT exemptions for new small and medium startups—as defined in the Small and Medium Enterprise Development Law 2015 and related laws—operating in the manufacturing sector. These companies are granted an IT exemption for the first 15 million MMK of their revenue for each of the first three years from the commencement of their business operations. According to Public Ruling 1/2023 issued by the Internal Revenue Department (IRD) on May 15, 2023, in order to benefit from these IT exemptions, companies must submit a copy of their Small and Medium Enterprise Registration to the IRD and maintain clear records of their accounts.
The UTL 2023 also makes changes to the IT payable by companies and individuals working in the oil and gas sector in Myanmar. For these companies, corporate income tax is charged at the rate of 25%, rather than the standard rate of 22%. This includes companies engaged in oil and natural gas exploration, drilling, and production activities, whether carried out under the Oil and Gas Law or any other law. For nonresident foreigners deriving a salary from working in the oil and gas sector, the following rates of IT apply:
Salary range IT Rate
Up to 2,000,000 0%
2,000,001 to 10,000,000 5%
10,000,001 to 30,000,000 10%
30,000,001 to 50,000,000 15%
Moreover, such workers will not benefit from deduction of basic expenses for spouses, children, or parents from taxable income (i.e., exemptions in sections 6 and 6A of the Income Tax Law).
For more details on the changes under the Union Tax Law 2023, or for advice on tax matters in Myanmar, please contact myanmar@tilleke.com.
For further information, please contact:
Aye Thuzar Hlaing, Tilleke & Gibbins
AyeThuzarHlaing@tilleke.com
