24 June 2020
On June 12, 2020, the Myanmar government issued a Union Taxation Law Ordinance to provide tax relief to the crisis-hit private sector as part of the wider “Overcoming as One: COVID-19 Economic Relief Plan.”
The new measures will be in effect for the 2020-2021 tax year, alongside the Income Tax Law and the Union Taxation Law 2019.
There are four main tax exemptions to be aware of:
- Non-refundable tax credit on 10% of total additional wages and salaries paid in the 2019-2020 Income Year.
- Deduction from income, classified as expenditure, equivalent to 125% of total additional wages and salaries paid in the 2019-2020 Income Year as compared against the 2018-2019 Income Year.
- Non-refundable tax credit equal to 10% of the total value of additional capital equipment inputs made in the 2019-2020 Income Year. This credit is not available to businesses already subject to tax exemptions of relief under the Myanmar Investment Law or Special Economic Zone Law.
- One-time depreciation on the value of capital equipment equivalent to 125% of the usual reduction value for the 2019-2020 Income Year.
This support for businesses is intended to help bolster the economy in these unprecedented times and, except where expressly stated above, the exemptions apply to all companies including those established under investment promotion laws and in special economic zones. As such, they should also go some way to promoting continued investment and trade for companies that are facing financial difficulty.
For further information, please contact:
Nwe Oo, Tilleke & Gibbins
nweoo@tilleke.com
