Key Highlights from the Union Taxation Law 2023

The 2020 Union Taxation Law ("UTL 2023") was enacted on 30 March 2023, which includes updates on tax rates and procedures relating to income tax, commercial tax and specific goods tax. The UTL 2023 took effect starting 1 April 2023 at the new financial year of 2023-2024. Some of the key highlights of the UTL 2023 include the increase in specific goods tax rates for liquor, the commercial tax exemption on Battery Electric Vehicles ("BEVs") and photovoltaic/solar-related equipment, and the increase in income tax threshold for small and medium-sized companies.

1. Specific Goods Tax ("SGT"). Specifically, the UTL 2023 increased the SGT tiers and rates for liquor. Starting 1 April 2023, the lowest tier ranges from MMK200 to MMK 1,400 with SGT of MMK209 per liter, and the highest tier is now at MMK 19,851 with SGT of 60% per liter value.
2. Commercial Tax ("CT"). CT rates remain at 5% except for the following: (i) internet services and hotel and tourism services increase to 15%; (ii) sales of SIM card and related services increase to MMK 20,000 per SIM card; (iii) sale of buildings constructed in Myanmar increase to 3%; (iv) sale of gold jewelry increase to 1%; and (v) export sale of electric power increasing to 8%. The UTL 2023 also enumerated 46 exempt goods and 34 exempt services. Included in the exemption list are BEVs (including batteries, accessories, and related services) and photovoltaic/solar-related equipment.
3. Corporate Income Tax ("CIT"). The CIT rate generally remains at 22%, but the CIT rate for companies engaged in oil and gas exploration and production is now 25%. The UTL 2023 increased the income tax exemption threshold for new small or medium-sized enterprise, depending on the industry, from MMK10 million to MMK15 million (approx. US$ 7,100) per year for three consecutive years, including the year of commencement of the business. The capital gains tax (CGT) is still at 10%, except for companies in the oil and gas exploration and production sector, which now ranges from 40 to 50%.
4. Gemstone Tax ("GT"). Under the UTL 2023, the tax exemption for diamonds and emeralds has been removed, but the royalty/gemstone tax remains at 5-11%.