Tax Note: Change of Financial YearOctober 27, 2017
Along with recent economic and political reforms, Union Government of Myanmar has made changes to Myanmar’s financial year (1 April to 31 March). The first new financial year will start from 1 October 2018 to 30 September 2019; i.e. 2018–2019 financial year. The decision was made on 7 September 2017 at Union Government Meeting No. (17/2017). Pursuant to section 210 of the Constitution of the Republic of the Union of Myanmar, the President has sent formal message to Myanmar Parliament (“Pyidaungsu Hluttaw”) on 29 September 2017 for implementation of change of financial year. Accordingly, the new deadline for the filing of annual tax returns under this new financial year will be 30 December 2019.
What will happen to the period from 1 April 2018 to 30 September 2018?
The financial year of 2017–2018 will be closed, as usual, on 30 March 2018. Therefore, annual tax returns for 2017-2018 financial year have to be lodged by 30 June 2018. Instructions regarding the six-month gap between the start of the new financial year and end of the old financial year have not been made available as yet. It is unclear whether it would be necessary to file another set of returns for the six-month period in December 2018 or whether the FY2018–2019 will have a longer financial period – 18 months period from 1 April 2018 to 30 September 2019.
Can companies change their financial year?
Companies cannot choose to have their own financial year and must follow the financial year prescribed by the Pyidaungsu Hluttaw for statutory purposes. Accordingly, companies are required to prepare audited financial statements in accordance with the financial year prescribed by the Pyidaungsu Hluttaw. These audited statements are required to be lodged with the Internal Revenue Department together with its annual tax returns.