Authors: Jean Loi, Ngwe Lin Myat Chit
The Ministry of Planning and Finance has enacted a new Withholding Tax (“WHT”) Notification 47/2018 (“Notification 47”) on 18 June 2018 which is effective from 1 July 2018. The Notification 47 abolishes 2% WHT for payments to resident citizens and resident foreigners for services rendered, goods purchases and lease payments within Myanmar.
Government organization, ministry and state-owned enterprise are excluded and 2% WHT is still applicable. Accordingly, government organizations, ministries and state-owned enterprises will continue to deduct 2% WHT when making payments to resident citizens and foreigners.
Furthermore, the minimum threshold for deductions of WHT has been changed to MMK 1 million for total payments within a year period. If payments exceed the threshold, companies are required to deduct WHT. We note that there is no threshold for payments made to non-residents.
The Notification 47 still imposes legal obligations on the payer to deduct WHT for payments subject to WHT.