April ’21 to August ’21 News and Updates

1.1       Myanmar Investment Commission

From the beginning of public holiday on 17 July 2021 resulted by Covid-19, MIC office has announced contact person names and phone numbers of department as focal persons whom investors/ companies can contact.

1.2       Directorate of Investment and Company Administration

DICA struck off 100 companies from registered list which filed to file Annual Return required under section 97 of MCL by its notification no. 86/2021 dated 16 July 2021.

Central Bank of Myanmar’s Memorandum in appointment of foreign employees

 Central Bank of Myanmar Memorandum MaVaBa/MP/FIR/BankSiSit/1(4/2021) dated 2 August 2021 https://www.cbm.gov.mm/sites/default/files/website_version.pdf imposed the followings in appointment of foreign personnel:

• The maximum number of foreign employees appointed with the prior approval of CBM is limited to 8 for small, 15 for medium and 25 for large.
• Foreign employees are not allowed for the position of chairman or vice chairman.
• If Chief Executive Officer position is foreigner, then Myanmar citizen shall be appointed as deputy chief officer position.
• Departments with heads of departments as foreigners shall not exceed 50% of total department. If head of department is foreigner, deputy head shall be Myanmar citizen. 
• Bank shall submit, from or of the foreign employee, expected result or projects to be designated, expertise and departmental capacity building.
• Approval for appointment will be probation 1 year for head of department, and proportion 6 months for other positions below head of department and renewable depending on the performance upto maximum 3 years including probation period. The bank shall submit application for approval together with performance report and plan for additional maximum 2 years’ renewal.
• And other detailed requirements.

Central Bank of Myanmar Directive to NBFI to obtaining prior approvals for change of address, opening of branch offices, closing of branch offices

Central Bank of Myanmar’s Directive No. 9/2021 dated 15 June 2021 instructed non-bank financial institutions to obtain prior approval, pursuant to Central Bank of Myanmar’s Directive No. 1/2021 dated 26 January 2021, for change of address, opening of branch offices, closing of branch offices.  For opening new branches, application shall be in prescribed form attaching directors’ resolution, feasibility study and market potential, evidence of photos of branch offices to be opened and security measurement.  Application for closure of branch office shall include resolution, reason and plan to manage assets and liabilities of branch.

Ministry of Commerce’s relaxation of import license

Ministry of Commerce by newsletter number 12/2021 announced a 3-month temporary relaxation of import license for drugs, medical equipment and liquid oxygen for 3 months starting from 12.7.2021.

Income-tax Rates on undisclosed income source reduced

State Administrative Council Law No. 20/2021 dated 17 June 2021 amended the Union Tax Law replacing the table in the Article 25 (a) of the Union Tax Law during the effective period.

Information about tax clearances required in purchase/development/sale of real estate property

Internal Revenue Department published clarification on 16 July 2021 regarding information about tax clearances required in purchase/development/sale of real estate property.

1. Purchase/development/sale of real estate property requires valuation of market price, filing income tax return, tax payments.

2. Valuation of market price for:

Properties in Yangon and Mandalay – must be dealt with relevant regional valuation team

Properties elsewhere – must be dealt with township valuation team

3. Tax assessment – must be within 1 year from valuation. Failure to do so will result in the nullification of the valuation. After failure, valuation must be re-done for the applicable market price.

4. Tax payments shall be done as follows:

• Purchase/development – submit income tax return to township revenue office where property is located and disclosed source of income where applicable; for income whose sources cannot be disclosed, income tax must be paid in accordance with the rates in the section 25 of the Union Tax Law 2020 and stamp duty must be paid on the property value. 

• Sale of real estate property–

• Within 30 days of sale, filing of income tax return and payment of applicable estimated taxes must be done at the township tax office of the taxpayer’s residence or where the property is situated.

• Income tax on the sale – 10% of [the valued current price less original purchase value and costs of sale] in accordance with the union tax law 2020.

• If the value of sale, exchange, transfer in any way of a unit of property or more within a year does not exceed kyat 10,000,000, income tax need not be paid on that regardless of resulting capital gains.

Information about tax clearances required in purchase/sales of motor vehicles

Internal Revenue Department published clarification on 16 July 2021 regarding information about Clarification for taxes on purchase/sale of motor vehicles.

1. Purchase/sale of motor vehicles requires standardized valuation, filing income tax return, tax payments.

2. Standardized valuation, tax assessments must be done at:

• Relevant township tax offices of the taxpayer for – registration of locally manufactured vehicles/second-hand purchase and title change.

• Yangon, Mandalay, and Naypyitaw – income tax collection offices for importing motor vehicles from overseas.

3. Instructions of tax payments for motor vehicle sale/purchase to the taxpayers 

• Purchase/title change– submit income tax return to township tax office and disclosed source of income where applicable; for income whose sources cannot be disclosed, income tax must be paid in accordance with the rates in the section 25 of the Union Tax Law 2020 and stamp duty must be paid on the property value.

• Sales of motor vehicles–

• Within 30 days of sale, filing of income tax return and payment of applicable estimated taxes must be done at the township tax office of the taxpayer.

• Income tax on the sale – 10% of [the valued current price less original purchase value and costs of sale] in accordance with the union tax law 2020.

• If the value of sale, exchange, transfer in any way of a unit of property or more within a year does not exceed kyat 10,000,000, income tax need not be paid on that regardless of resulting capital gains.

Information about change of tax assessment office

IRD published information on 16 July 2021 about requirement in changing tax assessment office.

1. There are cases of changing tax assessment offices resulted by business address, type of business and volume.
2. Current taxpayers – require application to Centralized Taxpayer Service Unit (CTSU) a month prior to the assessment.
3. Those applying for tax payer registration – require application to CTSU within one month of CTSU’s reply for designated tax office.
4. Application form and solid reasons required.
5. Download application form at ird.gov.mm

Information that township revenue offices will be open during public holiday.

Internal Revenue Department published information on 22 August 2021 that during extended public holiday resulted by Covid-19, township revenue offices will be open for timely payment of the stamp duty on execution of agreement before or at the time of execution as stipulated in section 17 of the Stamp Act.