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Tax Note: What’s in store for taxpayers under the Union Tax Law 2018?

Tax Note: What’s in store for taxpayers under the Union Tax Law 2018?

March 9, 2018

The financial year-end is approaching and the Union Parliament (the Pyidaungsu Hluttaw) finally announced the draft Union Tax Law (“Draft UTL”) 2018 on 13 February 2018, which will go into effect on 1 April 2018.

The Draft UTL finally clears up the confusion regarding changes in the financial year. The income year will remain the same (i.e. 1 April to 31 March) for all taxpayers apart from state-owned enterprises, whose income year will be the same as the government’s new financial year, which will be 1 October to 30 September. Furthermore, there is an interesting provision under the Draft UTL that allows taxpayers to have a different income year subject to the approval of the Internal Revenue Department and the Ministry of Planning and Finance.

Another note of interest is that the Draft UTL provides a tax amnesty on undisclosed sources of income, with a significant reduction in the tax rates imposed on them. If the taxpayer cannot prove the source of income for the funds used in the purchase of capital assets, the income tax rate on those funds is 3% for the first six months of the income year (i.e. from 1 April 2018 to 30 September 2018) and 5% for the remaining six months (i.e. 1 October 2018 to 31 March 2019). These compare favorably to the current UTL 2017 (effective for the income year 2017-2018), which levies an income tax of 30% on those funds. There is a somewhat lower rate available under the UTL 2017 if the taxpayer is able to prove the source of income for a portion of the funds, with that amount deducted from the total, and income tax imposed only on the remaining portion at progressive rates ranging from 15% to 30%. 

Apart from the abovementioned, there are not any major changes from the UTL 2017. The specific goods categories and tax rates remain the same, as do the commercial tax-exempt goods and services, except that in the Draft UTL, raw gold is included as an exempt good.


Jean is one of the region’s most experienced tax and regulatory specialists with more than 12 years of experience in Indochina, Myanmar and Singapore. She has advised on a large number of project transactions and tax disputes in the specialties of structuring, power plant projects and oil & gas. As the managing partner of VDB Loi, Jean has extensive experience with projects related to the market entries of companies in the infrastructure, telecommunications and financial services industries in the region, as well as with supply chains. She lives in Yangon.
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Ngwe Lin has a master's degree in finance from Umea University in Sweden and a bachelor's degree in commerce from the University of Newcastle in Australia. She has extensive experience advising multinational clients in a wide range of industries in terms of tax structuring, cross-border tax issues, tax disputes, and tax compliance matters. She has also advised an impressive list of oil and gas supermajors and IPPs on the tax structuring of their energy projects in Myanmar and has assisted on various tax dispute cases in the oil and gas sectors.

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