Highlight Of Myanmar Taxation
Htay Aung (Chris)
Myanmar Corporate Tax Administration
1. Taxable Period
The taxable period of a company is the same as its “Financial Year” (Income Year).
Income earned during the financial year is assessed to tax in the assessment year, which is the year following the financial year.
Prior to the financial year 2018/19, the fiscal year was from 1 April to 31 March.
The financial period of 31 March year-end was changed to 30 September from the financial year 2018/19 (i.e. from 1 October 2018) for state-owned enterprises and financial institutions and from the financial year 2019/20 (i.e. from 1 October 2019) for all other taxpayers.
The financial year-end of 30 September has changed to 31 March again, starting from 1 October 2021.
2. Tax Returns
In general, annual income tax returns must be filed within three months from the end of the financial year.
Tax returns for capital gains must be filed within 30 days from the date of disposal of the capital assets.
If a taxpayer discontinues one’s business, returns must be filed within one month from the date of discontinuance of business.
The failure of a taxpayer to file income tax returns, knowing that assessable income has been obtained, is deemed to have ‘fraudulent intention’.
3. Tax Audit Process
Under the Myanmar Income Tax Law, if it is found that there is a fraudulent intention to evade tax, the assessment or reassessment of income tax can be made at any time on the income that has escaped assessment of tax.
Failure by a taxpayer to file a return of income knowing that assessable income has been obtained, failure to comply with the notice of the IRD to submit accounts and documents, including the tax return and profit and loss accounts within the time prescribed, or submitting forged instruments and other documents are included within the meaning of fraudulent intention. If the tax authority in the course of investigation finds that a taxpayer has concealed income or particulars relating to income, the taxpayer may be permitted to fully disclose the facts within the specified time. In addition, the taxpayer must pay a penalty equal to 100% of the tax increased on account of the concealment. If the taxpayer fails to disclose the particulars within the specified time or discloses less than the income concealed, the taxpayer will also be subject to prosecution, in addition to paying the tax and penalty. If the taxpayer is found guilty, the taxpayer may be punishable with imprisonment for between three to ten years.
Under the new TAL that shall be effective from 1 October 2019, the penalties for concealing or providing incorrect information and tax evasion will change.