Myanmar has issued amendments levying a new tax on nonresident Myanmar citizens’ salary income. The State Administration Council (SAC) instituted the tax by amending the Union Tax Law 2023 with Law No. 55/2023 on September 12, 2023, effective from October 1, 2023, to March 31, 2024.
As defined by Myanmar’s Income Tax Law, nonresident citizens are those who reside and earn income outside Myanmar at any time during the applicable financial year. The recent amendment to the Union Tax Law levies a tax on nonresident citizens’ salary income earned abroad, as detailed below, in addition to the 10% tax on other types of income obtained abroad without deducting the tax reliefs under sections 6 and 6-A of the Income Tax Law. The tax is payable in the same currency as the income obtained.
This tax on nonresidents’ salary income earned abroad can be calculated according to whichever of the two methods below yields the lowest amount of tax due:
- The applicable salary income tax (0% to 25%) under the Union Tax Law after deduction of allowances for the respective financial year; or
- A 2% tax on salary income without deducting the amount of the exemption provided by sections 6 and 6-A of the Income Tax Law.
Taxpayers may also subtract the amount of foreign taxes paid from the total tax calculated under this law.
Employees of an overseas company who work remotely from Myanmar and receive payment from overseas are unaffected by this amendment as they are only involved as resident citizens.
Nonresident citizens must remit taxes to the Myanmar embassy in their country either monthly, quarterly, annually, or at the time of passport renewal. Evidence of tax payment must also be presented when renewing an overseas worker identification card at the Ministry of Labour, according to current practice.
For more details on Myanmar’s tax requirements, please contact Tilleke & Gibbins at [email protected].