Introduction This article provides a summary of Myanmar’s tax and tariff updates in 2022. Perhaps most prominent are the commercial tax, special goods tax, and tariff rate exemptions for battery electric vehicles (BEVs) and an increase in special commercial income tax for companies engaging in oil and gas exploration and production in Myanmar. This is good news for environmental protection efforts through taxation law. Additionally, Myanmar announced its updated Customs Tariff of Myanmar 2022, which covers internationally classified harmonized system (HS) codes and the HS codes of the ASEAN Harmonized Tariff Nomenclature. Furthermore, Myanmar’s Internal Revenue Department (IRD) also issued clarifications on tax avoidance, negligent underpayment of tax, misrepresentation of tax information, tax evasion, withholding tax on services, and tax refunds. Union Taxation Law 2022 and Amendment On March 30, 2022, the Union Taxation Law 2022 was enacted by the State Administration Council (SAC) with the SAC Law No. 6 of 2022; the law was further amended on November 17, 2022 by SAC Law No. 48 of 2022. The amended law exempts BEVs and their batteries from commercial tax and special goods tax, effective from October 1, 2022 to March 31, 2023. The amendment also provides that companies engaging in oil and gas exploration and production in Myanmar are subject to a special commercial income tax rate of 25% on their total net profit from April 1, 2022, to March 31, 2023. Tax Avoidance, Underpayment of Tax, Misrepresentation of Tax Information, and Tax Evasion The IRD issued a public ruling on November 16, 2022, to address tax avoidance, underpayment of tax, misrepresentation of tax information, and tax evasion. This public ruling was brought under the Tax Administration Law 2019 and concerns relevant provisions in that law. Tax avoidance is interpreted as occurring when a person who understands the tax

On November 11, 2022, Myanmar’s Ministry of Commerce (MOC) announced a pilot period for importing electric vehicles into Myanmar, which came into force with MOC Order No. 62/2022, issued under the Import and Export Law. A separate order (No. 61/2022) issued on the same day specifies rules for importation of motorcycles by companies that do not have a certificate to open a showroom, as well as rules for opening motorcycle showrooms. Electric Vehicle Importation According to the order, which takes effect January 1, 2023, “electric vehicles” includes only battery electric vehicles (BEVs) for both personal use and passenger use. In order to import electric vehicles into Myanmar without having a certificate to open a showroom, companies must: Be registered as a company, either wholly owned by nationals or a joint venture, at the Directorate of Investment and Company Administration (DICA); Be able to present the purchase and sales agreement for each brand of imported electric vehicles; Receive approval from the National Steering Committee for Development of Electric Vehicles and Associated Businesses, and import according to the quality and quantity of electric vehicles permitted by the committee; Arrange the necessary warranty, spare parts availability, and after-sales service for the imported electric vehicles; Deposit a bank guarantee of MMK 50 million at a bank recognized by the Central Bank of Myanmar; and Apply for a purchase permit at the MOC, for the purpose of registering the imported vehicles with the Road Transport Administration Department. BEV Tax Exemption Following MOC Order No. 62/2022, BEVs and their batteries are now exempted from commercial tax and special goods tax, which came into force with the Law Amending the Union Tax Law 2022 (State Administrative Council Law No. 48/2022) dated November 17, 2022. These tax exemptions will be effective from October 1, 2022, to March

Thailand’s Board of Investment (BOI) has extended its previously announced period for reduction of import duty on imported raw and essential materials for battery manufacturing for electric vehicles and other applications. The BOI’s announcement No. 5/2565 dated August 8, 2022, extended the reduction period to a maximum of five years. The BOI’s promoted activities list includes two battery-manufacturing business activities: Activity 4.8.3.1 – Battery manufacturing Activity 5.2.6.1 – High energy density battery manufacturing Qualifying battery manufacturers who have cell or module manufacturing processes are eligible for 90% import duty reductions on raw and essential materials that cannot be produced in Thailand. These reductions will be available on an annual basis, and are renewable for five years in total—up from the original two years. Existing projects (i.e., those which have the original two-year duration in their BOI certificate) can also benefit from the extension by preparing a project amendment form, along with a clarification letter and supporting documents, for submission to the BOI office. For more details on these customs duty reductions, or on any aspect of investment promotion in Thailand, please contact Charuwan Charoonchitsathian at [email protected] or +66 2056 5657, or Napassorn Lertussavavivat at [email protected] or +66 2056 5662.

On June 21, 2022, Thailand’s cabinet updated and approved in principle a five-year personal income tax exemption for foreign filmmaking companies and actors working on motion pictures in Thailand. The tax measure, which is intended to promote the use of Thailand as a filming location, is similar to a 2012 law that authorized a temporary personal income tax exemption for nonresidents shooting movies for foreign filmmaking companies. Normally, nonresident artists are subject to tax on income from filmmaking in Thailand. These artists have to declare their income and submit personal tax returns to the local tax authorities for both midyear and annual tax submission deadlines. Depending on the amount of income (including remuneration, per diem, travel expense allowance, etc.), personal income tax rates can be up to 35%. With the exemption, however, nonresident actors will in effect be able to bypass these taxation requirements. This incentive will not grant a tax exemption to foreign directors, producers, film crews, or other filmmaking staff. However, based on current Thai Revenue Department guidelines, a filmmaking company will have no tax liability in Thailand if no income is earned during the filmmaking itself. The incentive scheme is expected to pass into law soon after the cabinet’s approval. While this incentive provides strong incentives for foreign companies to film in Thailand, a number of other considerations will remain—for instance, customs duty liability on equipment temporarily brought into Thailand, personal income tax implications, and film crew members’ compliance with legal and regulatory requirements. For more information on the exemption for foreign filmmaking companies and actors, or on any aspect of risk mitigation and legal compliance relating to filming operations in Thailand, please contact Auaychai Sukawong at [email protected] or +66 2056 5537.