Government abolishes 2% of withholding tax on domestic payment

Government abolishes 2% of withholding tax on domestic payment

The Ministry of Planning and Finance released its latest notification (47/2018) on withholding tax, which replaces notification (51/2017) released on May 22, 2017. Effective July 1, an existing 2% withholding tax will be abolished 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 2% withholding tax. However, 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 2.5%. Residents will be exempt from paying withholding taxes on interest on loans, while nonresidents must pay 15%. Regarding royalties for the use of licenses, trademarks and patents, 10 pc of withholding tax will be levied on residents, while non-residents must pay 15%.

 Source- Myanmar Times

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