Tax administration is an important part of every country’s tax reform system. The recent reforms of the Internal Revenue Department (IRD) in Myanmar and the enactment of the Tax Administration Law (TAL) are major steps towards modernizing the tax system in the country. The Pyidaungsu Hluttaw enacted TAL on 7 June 2019 and has already been effective since 1 October 2019. TAL aims to provide guidance and simplification of the administrative procedures in relation to the following taxes for all tax payers in Myanmar:
(I) Income Tax;
(II) Commercial Tax;
(III) Specific Goods Tax;
(IV) Other tax law that is assigned to the Director-General (DG) of the IRD
(I) Income Tax;
(II) Commercial Tax;
(III) Specific Goods Tax;
(IV) Other tax law that is assigned to the Director-General (DG) of the IRD
Below are the key changes and features under the TAL:
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KEY AREAS
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DESCRIPTION
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1) Tax Payer Registration and Tax Identification Number (TIN)
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Every person who is liable to pay tax will have a tax identification number (TIN). Failure to register or deregister shall result in penalty equivalent to 10% of tax payable. TIN should be mentioned on all the returns, declarations or records submitted by the taxpayers and on all correspondences issued by the DG to taxpayers.
Where there is a change in circumstances, the taxpayer must notify the DG of any changes to the name (including business name), address, business address, or any change in nature of business, within fifteen (15) days for Commercial Tax and Specific Goods Tax and one (1) year for Income Tax related matters. Failure to notify the change shall result in penalty equivalent to 10% of the tax payable. The TIN is aimed at aligning with the company registration number provided by Directorate of Investment and Company Administration (DICA), and for individuals, their personal identification number. |
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2) Tax Clearance Certificate (TCC)
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Under TAL, taxpayers can request the DG for a tax clearance certificate (TCC) to confirm that they are cleared from any tax liabilities during that year.
In order for the DG to issue a TCC to a taxpayer, the DG will ensure that there are:
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3) Issuance of Public Rulings and Advance Rulings
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TAL allows for the issuance of public rulings and advance ruling to taxpayers. They are issued in order to provide consistency in the implementation of tax laws.
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4) Communication
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The DG has the right to issue the notice, announcement, statement, form, schedule and other document, which will be stipulated or issued by the IRD. Any communication issued will only be considered valid if the duty and function are legally assigned to the DG, it is in the writing, signed by a tax officer and delivered to the relevant taxpayer or person addressed to. The notice will be deemed to be delivered on:
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5) Rights and Duties of Taxpayers
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Resident taxpayers are required to appoint an agent/officer in order to record and maintain all necessary accounts & records and to perform duties required by tax laws. Non-resident taxpayers are also required to appoint an agent in order to perform duties as required by the tax laws.
The taxpayer must file the return either on the prescribe time and place under the tax law or under the instructions of the DG. The DG may send a notice for tax due, if the taxpayer fails to pay the tax that is due. The tax payer will be regarded as a defaulter is payment of the tax is not made within thirty (30) days of the notice. The DG may grant time extension or allow payments to be made in instalments. All tax payments must be made in Myanmar Kyats (i.e. MMK), unless otherwise provided by the tax law. The taxpayer has a right to receive information on the tax payment and also procure a copy of the tax returns. |
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6) Tax Refunds
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If the tax payment exceeds the assessable amount, the taxpayer can request that DG refund the excess within a period of six (6) years from the relevant assessment period or use the excess to offset as advance income tax within the next 12 months.
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7) Interest Rates for Underpayment and Refund
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Interest is payable on the tax payable by the taxpayer from the date of tax due till the date of actual payment of tax, if the taxpayer does not make tax payment on time.
Interest on the refund will be paid from the confirmed date of refunds till the date the refunds is made The interest rates will be determined by the Ministry of Planning and Finance (MoPF) |
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8) Recovery of Tax
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Six years commencing from the date of notice specifying the taxpayer as a defaulter.
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9) Assessment of Penalty
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Seven (7) years after the breach that caused the penalty and twelve (12) years if the offence involved fraudulent or misrepresentation with intentional negligence.
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10) Assessment and Reassessment
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11) Shareholder’s Liability
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Shareholders receiving dividends in cash or in kind in a year before winding up of the company, shall be liable to pay taxes due and payable of the company equivalent to the amount of dividend received by the shareholder.
In case of different shareholders, the shareholders that has shares in the period of which tax will be liable. |
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12) Administrative Review and Appeal
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How can Inter Group help you?
Following the enactment of the TAL, it is important for taxpayers to be updated with the latest tax rules and regulations, in order to comply with the tax obligations in a proper and timely manner. Get in touch with our team today. We will be able to inform you of your compliance requirements and advice you accordingly. We are committed to help our clients be up to date with the tax compliance procedures and comply with their tax obligations on time. Our Inter Group’s Myanmar office is on the ground to facilitate and assist with liaising with IRD.
