Myanmar Tax Regime

Myanmar taxes resident companies on worldwide income and non-resident companies and Myanmar Investment Commission (MIC)-registered entities on Myanmar-source income, at a standard corporate income tax rate of 22%. The regime differentiates entity type and sector: public companies listed on the Yangon Stock Exchange enjoy a reduced 17% rate, while oil and gas exploration and production companies are taxed at 25%. Investment is channelled through the Myanmar Companies Act, the Myanmar Investment Law (MIL) of 2016, or the Myanmar Special Economic Zone (SEZ) Law, with the vehicle chosen affecting eligibility for tax holidays, land-use terms and foreign ownership flexibility. The system is source- and entity-type-driven rather than built around a European-style participation exemption or group relief architecture, and administration sits with the Internal Revenue Department (IRD).

1.1 Sources

Primary legislation includes the Income Tax Law, the Union Taxation Law (enacted annually and setting rates and thresholds for the fiscal year), the Myanmar Investment Law (2016) and its implementing rules (2017), the Myanmar Special Economic Zone Law, and the Commercial Tax Law.

1.2 Recent developments

The standard corporate income tax rate was reduced from 25% to 22% with effect from 1 October 2021 for companies incorporated under the Companies Act or Special Companies Act, non-resident branches registered under those laws, and enterprises operating under MIC or SEZ permits; the oil and gas exploration and production sector remains taxed at 25%, and Yangon Stock Exchange-listed public companies continue to benefit from a reduced 17% rate. The annually enacted Union Taxation Law continues to be the mechanism through which specific rates, commercial tax schedules and advance income tax collection rules are updated, so taxpayers must check the current year's Union Taxation Law for period-specific figures layered on top of the Income Tax Law framework.

Headline statutory corporate income tax rate for a resident company. Where sub-national (state, provincial, cantonal or municipal) corporate taxes apply, the combined rate reported by the OECD is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

Top marginal statutory personal income tax rate on employment income for a resident individual. Where sub-national (state, provincial, cantonal or municipal) income taxes are a standard part of the system, the combined top rate is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

2.1 Rates and residence

Companies incorporated in Myanmar under the Myanmar Companies Act or the Special Companies Act, enterprises operating under an MIC permit or within a Special Economic Zone, and non-resident foreign organisations registered under the Companies Act (such as a branch of a foreign company) are all taxed at a standard 22% rate on their assessable income. Resident companies are taxed on a worldwide basis, meaning foreign-source income is generally includible; non-resident companies and MIC-registered companies are taxed only on Myanmar-source income, with income derived from capital assets located in Myanmar or from any Myanmar source deemed to be Myanmar-source income. Two rate carve-outs apply: companies operating in oil and gas exploration and production are taxed at 25%, while public companies listed on the Yangon Stock Exchange benefit from a reduced 17% rate. There is no separate corporate income tax at the local or regional level.

2.2 Dividends and participation exemption

Myanmar operates a one-tier corporate tax system: dividends distributed out of profits that have already borne corporate income tax are exempt from further tax in the hands of the recipient, whether the recipient is a company or an individual, and shares of profit received by a Myanmar taxpayer from an association of persons (partnerships, joint ventures and similar unincorporated arrangements) are likewise exempt from further income tax. This one-tier design functions as a de facto participation relief for domestic dividend flows, removing the need for a separate EU-style participation exemption regime, though it does not extend the same automatic relief to all cross-border dividend receipts, which should be analysed under the specific withholding and foreign-tax-credit rules applicable to the recipient.

2.3 Income determination and deductions

Taxable income is computed from Myanmar-source (and, for residents, worldwide) gross income less allowable deductions for expenses wholly and exclusively incurred in the production of that income, including ordinary business expenses, statutory depreciation on capital assets, and specific allowances for research and development. Non-deductible items include capital expenditure not qualifying for depreciation, certain related-party payments failing arm's-length testing, provisions or reserves not specifically permitted, and expenses not adequately substantiated. Depreciation is generally computed on a straight-line basis using statutory rates by asset class (buildings, machinery, vehicles and other categories each carrying prescribed rates), with special allowances available for certain investment-promoted assets under MIC or SEZ permits.

2.4 Interest limitation

Myanmar does not apply a codified EBITDA-based interest limitation rule of the ATAD/BEPS Action 4 type. Interest deductibility instead turns on general arm's-length and business-purpose principles, together with withholding tax obligations on interest paid to non-residents (see Section 4). Related-party loan pricing and thin-capitalisation-style scrutiny may be applied administratively by the Internal Revenue Department where debt levels or interest rates appear inconsistent with normal commercial terms, particularly for MIC-registered foreign-invested companies.

2.5 Losses

Tax losses may generally be carried forward for up to three consecutive tax years following the year in which the loss was incurred, to be set off against future assessable income; losses cannot be carried back. Loss carryforward is generally available to both resident and non-resident registered companies, subject to continuity-of-business and other conditions applied by the Internal Revenue Department, and unused losses lapse after the three-year window.

2.6 Group taxation

Myanmar does not have a fiscal consolidation, group relief or combined-filing regime; each company is assessed and taxed as a separate legal entity, and losses of one group company cannot be surrendered to or offset against the profits of another. Multinational groups operating several Myanmar entities (for example a manufacturing MIC company and a separate services company) must therefore manage intercompany transactions, financing and cost allocations without the benefit of consolidated relief.

2.7 Controlled foreign companies

Myanmar does not operate a CFC attribution regime. Myanmar resident companies are not taxed currently on the undistributed profits of controlled foreign subsidiaries; foreign-source income is brought into charge for resident companies only when actually derived or remitted in a manner that constitutes Myanmar-source or worldwide assessable income under the Income Tax Law, rather than through a look-through CFC mechanism.

2.8 Transfer pricing

Myanmar has been progressively developing formal transfer pricing rules and guidance aligned with OECD principles, requiring related-party transactions to be priced on an arm's-length basis and increasingly expecting supporting documentation for cross-border intercompany dealings, particularly for MIC-registered foreign-invested enterprises subject to closer scrutiny of management fees, royalties and intra-group financing. Formal statutory documentation thresholds and country-by-country reporting obligations remain less developed than in mature OECD transfer pricing regimes, and taxpayers should expect transfer pricing questions to be raised in the ordinary course of an IRD audit rather than through a dedicated advance pricing agreement programme.

2.9 Incentives

Companies registered under the Myanmar Investment Commission (MIC) or operating within a Special Economic Zone can access income tax holidays of up to seven years (typically longer in less-developed zones and shorter in developed zones), accelerated depreciation, exemption or relief from customs duty on imported capital goods and raw materials for export production, and longer land-use terms than are available to companies registered solely under the Companies Act. Incentive eligibility and duration depend on the zone classification (promoted/less-developed regions typically receive longer holidays) and sector, with qualifying investments required to meet MIC permit conditions on capital, employment and export performance.

2.10 Pillar Two

Myanmar has not enacted Pillar Two (global minimum tax) legislation and is not currently implementing an income inclusion rule, undertaxed profits rule or qualified domestic minimum top-up tax. In-scope multinational groups with Myanmar operations should nonetheless monitor Myanmar's 22% headline rate — and particularly the effect of MIC/SEZ tax holidays, which can reduce the effective rate on Myanmar operations well below 15% during the holiday period — for purposes of parent-jurisdiction top-up tax calculations under the ultimate parent's Pillar Two regime.

2.11 Branch income and reorganisations

A branch of a foreign company registered under the Companies Act is taxed at the standard 22% rate on Myanmar-source income (or worldwide income if the branch is treated as resident), computed on the same basis as a locally incorporated company; there is no separate branch profits or remittance tax beyond the ordinary corporate rate, though remittances of profit are subject to foreign exchange control procedures administered by the Central Bank of Myanmar. Myanmar does not have a comprehensive statutory tax-neutral reorganisation regime comparable to those in mature OECD jurisdictions; mergers, transfers of business and restructurings are generally analysed under general principles and can trigger taxable gain on asset transfers absent a specific relief or MIC-approved restructuring exemption.

3.1 Residence and rates

Individuals resident in Myanmar (broadly, present in Myanmar for 183 days or more in the relevant tax year, or citizens resident abroad electing resident treatment in certain cases) are taxed on worldwide income; non-residents are taxed on Myanmar-source income only. Employment and other income is taxed at progressive rates rising from 0% on the lowest bands through intermediate bands to a top marginal rate of 25% for higher income levels, with the specific bands and thresholds set annually in the Union Taxation Law. A basic allowance and dependent-relative allowances (spouse, children, parents) reduce assessable income before the progressive schedule is applied.

3.2 Capital income and real estate

Capital gains on the sale of capital assets (including shares and real property) are generally taxed at a flat rate, with a higher rate historically applicable to gains from the oil and gas sector; standard capital gains outside that sector are taxed at a flat rate distinct from the progressive employment-income schedule. Dividends received by individuals from a Myanmar company are exempt under the one-tier system described in Section 2.2. Interest income earned by individuals is generally taxable, subject to specific exemptions for certain bank deposit interest under rules set from time to time. Rental income from real property is assessable, with statutory deductions for repairs and related costs.

3.3 Social security and payroll

Employers and employees contribute to the Social Security Board scheme, covering health and social care, employment injury, and (for larger employers) family and old-age benefits; combined contribution rates are modest by regional standards, with the employer bearing the larger share. Employers are responsible for monthly withholding of employee income tax (pay-as-you-earn style withholding) and remittance to the Internal Revenue Department, together with employer-side Social Security Board contributions.

3.4 Inbound individuals

Myanmar does not levy a net wealth tax, and there is no general inheritance tax; gift and property transfer transactions can attract stamp duty rather than a dedicated gift tax. There is no dedicated statutory expatriate tax regime; foreign nationals working in Myanmar are generally taxed under the same residence-based rules as citizens, with treaty relief available where a double tax agreement applies to the individual's home jurisdiction. Foreign employees of MIC-registered enterprises may benefit indirectly from the enterprise-level tax holidays where remuneration structuring is coordinated with the underlying investment permit, though personal income tax itself is not exempted by the MIC permit.

Myanmar applies withholding tax on specified categories of domestic and cross-border payments, with differentiated rates for payments to residents versus non-residents. Myanmar's double tax treaty network is comparatively limited, covering a modest number of partner jurisdictions (including several regional and historical trading partners), so withholding is generally applied at full domestic rates on outbound payments to non-treaty jurisdictions; treaty relief should be confirmed on a counterparty-by-counterparty basis.

Withholding under the annually enacted Union Taxation Law extends to a range of domestic procurement, contractor and service payments at low single-digit rates, functioning as an advance collection mechanism creditable against the recipient's final income tax liability rather than a final tax in most cases. Treaty relief, where available, typically reduces the non-resident interest and royalty rates, but taxpayers should verify the specific treaty article and any procedural certification requirements before applying a reduced rate at source.

5.1 General anti-abuse and hybrids

Myanmar's Income Tax Law and Union Taxation Law framework include general anti-avoidance concepts allowing the Internal Revenue Department to disregard or recharacterise arrangements entered into principally to avoid or reduce tax, though the framework is less codified than the statutory general anti-abuse rules found in OECD jurisdictions. Myanmar does not have a dedicated hybrid-mismatch neutralisation regime of the ATAD/BEPS Action 2 type; cross-border hybrid financing arrangements are addressed, to the extent at all, through general anti-avoidance and withholding tax principles rather than a specific hybrid framework.

5.2 Exit taxation and disclosure

Myanmar does not impose a formal exit tax on corporate migration or on the transfer of a business's tax residence. There is no mandatory cross-border arrangement disclosure regime comparable to DAC6. Foreign exchange controls administered by the Central Bank of Myanmar govern repatriation of capital and profits and interact with the tax rules in practice, since remittance approvals typically require evidence of tax clearance, effectively giving the tax authority visibility into outbound capital and profit flows even without a dedicated disclosure statute.

6.1 Commercial tax (VAT-equivalent)

Myanmar does not operate a conventional value-added tax; instead, commercial tax is levied at a standard rate of 5% on the sale of goods, provision of most services, and imports, with a limited list of exempt goods and services (including certain agricultural products and basic necessities specified in the Union Taxation Law) and specific higher rates for selected categories — internet and telecommunications services are subject to commercial tax at 15%, and certain luxury or specific goods (such as cigarettes, alcohol and gemstones) attract higher specific commercial tax rates set out in the Union Taxation Law schedules. Commercial tax is generally filed and paid on a quarterly basis, with input credit available for commercial tax paid on qualifying purchases used in the production of taxable output, subject to documentation requirements.

6.2 Transaction, payroll and other taxes

Stamp duty applies to specified legal instruments, including property transfers, leases and certain contracts, at rates varying by document type and transaction value. Specific goods tax (a form of excise) applies to items such as cigarettes, alcoholic beverages, fuel, vehicles and gemstones at rates set in the Union Taxation Law, often layered on top of ordinary commercial tax for the same goods. There is no net wealth tax on individuals or companies. Municipal and regional development fees apply in some jurisdictions to specific business activities and property. Import duties administered by Myanmar Customs apply to goods entering the country, with MIC/SEZ-registered enterprises frequently qualifying for duty exemptions on capital goods and raw materials used in export production.

7.1 Filing, assessment and audit

The tax year generally follows the fiscal year prescribed by the government (historically 1 October to 30 September, though the government has adjusted the fiscal year definition in recent years — taxpayers should confirm the current fiscal year applicable under the relevant Union Taxation Law). Companies file annual income tax returns with the Internal Revenue Department, supported by audited financial statements above specified size thresholds, and make advance income tax payments during the year based on estimated or prior-year income. The Internal Revenue Department conducts risk-based audits, with MIC-registered and larger companies typically subject to more frequent review. The general assessment period allows the IRD to reopen and reassess within a period specified in the Income Tax Law, extended in cases of fraud or non-disclosure.

7.2 Rulings, appeals and penalties

Taxpayers may seek clarification from the Internal Revenue Department on the application of specific provisions, though a formal binding advance ruling programme comparable to those in mature OECD tax administrations is not broadly available. Assessments may be appealed administratively within the Internal Revenue Department hierarchy and, ultimately, to the Revenue Appellate Tribunal and the courts. Penalties apply for late filing, late payment and understatement of tax, with interest accruing on unpaid amounts; the Internal Revenue Department has discretion to mitigate penalties in cases of voluntary disclosure or reasonable cause.

Because Myanmar's fiscal year definition and specific rate schedules are reset annually through the Union Taxation Law, taxpayers should confirm the current year's exact filing deadlines and advance-payment schedule with the Internal Revenue Department rather than relying solely on the prior year's calendar.

9.1 Entity choice

A private company limited by shares registered under the Myanmar Companies Act is the standard vehicle for both domestic and foreign investors not seeking MIC incentives. Foreign investors seeking tax holidays, longer land-use rights or streamlined capital repatriation typically register under an MIC permit or within a Special Economic Zone, which requires a more detailed investment application but unlocks the incentive package described in Section 2.9. A branch of a foreign company, registered under the Companies Act, is available for representative or limited-scope operations and is taxed on the same 22% basis as a locally incorporated company. Joint ventures with local partners remain common in sectors with foreign ownership restrictions.

9.2 Structuring and incentives

New export-oriented manufacturing or significant capital investment projects should evaluate MIC or SEZ registration early, since the tax holiday, customs relief and land-use benefits are tied to the permit rather than available automatically to Companies Act registrants. Because Myanmar has no group relief regime, groups with multiple Myanmar entities should structure intercompany financing and service arrangements to minimise stranded losses in loss-making entities (given the three-year loss carryforward limit) and to ensure related-party pricing is defensible under increasing IRD transfer pricing scrutiny. Listed-company status on the Yangon Stock Exchange, where achievable, provides a meaningful rate reduction to 17% and may be a relevant long-term structuring consideration for larger Myanmar operations.

9.3 Worked effective-rate illustration

A Myanmar manufacturing company registered under the Companies Act (standard 22% rate, no MIC holiday) earns assessable income for the year of MMK 900,000,000 after deducting cost of goods sold, operating expenses and statutory depreciation of MMK 1,600,000,000 from gross revenue of MMK 2,500,000,000. Corporate income tax at 22% is 900,000,000 × 0.22 = MMK 198,000,000, an effective rate of 198,000,000 / 900,000,000 = 22% of taxable income, or 198,000,000 / 2,500,000,000 = 7.92% of gross revenue. If the same company had instead qualified for a five-year MIC tax holiday in its first profitable year, the MMK 198,000,000 of income tax would be fully relieved for that year, reducing the effective corporate tax rate to 0% during the holiday period before reverting to the standard 22% rate on expiry — illustrating why the MIC/SEZ registration decision in Section 9.2 has a materially larger effect on effective tax rate than ordinary deduction planning within the standard regime.

9.4 Compliance

Expect quarterly commercial tax filings, quarterly advance income tax instalments, monthly payroll withholding, and an annual income tax return supported by audited accounts above applicable size thresholds. MIC/SEZ-registered enterprises carry additional reporting obligations to the Myanmar Investment Commission or SEZ management committee to substantiate continued compliance with permit conditions (capital deployment, employment and, where applicable, export performance). Foreign exchange remittance of profits and capital requires coordination with the Central Bank of Myanmar's foreign exchange rules and evidence of tax clearance, and should be planned well in advance of an intended repatriation date.