Government removes 2pc of withholding tax on domestic payments

The Ministry of Planning and Finance yesterday released its latest notification (47/2018) on withholding tax, which replaces notification (51/2017) released May 22, 2017.

Effective July 1, an existing 2 percent withholding tax will removed on residents for payments involving cooperative business with the government, partnerships, joint ventures, companies, registered associations or organisations,cooperative societies, foreign companies, foreign enterprises involved in the purchase of goods and for work performed or services rendered within the country under a contract.

Local small and medium enterprises and companies will also be exempt from paying the 2pc withholding tax.

Payments by state organisations and enterprises for the purchase of goods and supply of services within the country under a contract will still be subject to a 2pc withholding tax.

Non-residents will continue to pay withholding taxes at 2.5pc.

The decision, which follows a January move to remove withholding taxes on exports, is an “excellent step by the government,” said U Soe Tun, chair of the Myanmar Automobile Development Public Company.

Meanwhile, residents will be exempt from paying withholding taxes on interest on loans, while non-residents must pay 15pc.

Residents must also pay a 10pc withholding tax on royalties for the use of licenses, trademarks and patents, while non-residents must pay 15pc.

Source : Myanmar Times

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