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Myanmar: Withholding tax exemption, payments for services rendered by nonresidents

Myanmar: Withholding tax exemption, services rendered

The tax authority issued guidance concerning when an exemption from withholding tax applies with regard to payments for services rendered outside of Myanmar, or for services rendered within Myanmar by nonresidents from a country having an income tax treaty for the avoidance of double taxation with Myanmar.

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The guidance—practice note No. 2/2020 (3 September 2020)—provides that when making payments to a non-resident for services rendered outside Myanmar, taxpayers need to apply to the tax authority and present documentary evidence to substantiate that the services were rendered outside Myanmar so that the tax authority can issue an approval that the payment is not subject to withholding tax in Myanmar.

The guidance allows for certain taxpayer self-assessments, and requires a return to be filed reflecting that the payment is not subject to Myanmar withholding tax. This treatment may apply if the transaction or contract value is less than U.S. $100,000.

In instances when the service provider is located in a tax treaty-partner country, the taxpayer must determine that certain conditions are satisfied (i.e., eligibility under the self-assessment system, a contract value less than U.S. $100,000, and no permanent establishment of the service provider in Myanmar).

Read a November 2020 report prepared by the KPMG member firm in Myanmar

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