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Tax Notes: Accommodation and transportation provided by employers are not subject to tax

Tax Notes: Accommodation and transportation provided by employers are not subject to tax

January 19, 2017

The Law provides that fringe benefits provided to employees working in Myanmar will be subject to Personal Income Tax (“PIT”). According to section 9 of the Income Tax Law (“ITL”) “any person who receives or has accrued salary, wages, annuity, bonuses, awards and fees or commissions received in lieu of or in addition to the salary or wages from the employer shall be subject to paying tax under the income class, “salary”, all types of fringe benefits provided by the company is considered as taxable fringe benefit and PIT is applicable.

We have received confirmation letter from the Internal Revenue Department (“IRD”) that housing and transportation paid by the employers for its employees will not be subject to PIT for financial year 2016-17 onwards. For clarity, please refer to the following scenarios:

  • Scenario 1: Housing allowance will be regarded as a non-taxable fringe benefit for employees, if the company allows its employees to stay in an apartment owned by the company or if the company pays the rental directly to the lessor. In this case, PIT is not applicable on housing benefits provided to the employees.
  • Scenario 2: If the company provides housing allowance (cash allowances) to its employees, the housing allowance will be considered as a taxable fringe benefit and in this case, PIT will be applicable on the housing allowance.

Similar principles apply to transportation benefits provided to employees. If the company purchased a motor vehicle or rent a motor vehicle for its employees, this is not subject to PIT. Companies that provide housing and/or transportation benefits in Scenario 1 to employees can make PIT adjustments before 31 March 2017 for the financial year 2016-17.

Should you require further clarification on the above please do not hesitate to contact us.


Jean is one of the region’s most experienced tax and regulatory specialists with more than 12 years of experience in Indochina, Myanmar and Singapore. She has advised on a large number of project transactions and tax disputes in the specialties of structuring, power plant projects and oil & gas. As the managing partner of VDB Loi, Jean has extensive experience with projects related to the market entries of companies in the infrastructure, telecommunications and financial services industries in the region, as well as with supply chains. She lives in Yangon.
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Ngwe Lin has a master's degree in finance from Umea University in Sweden and a bachelor's degree in commerce from the University of Newcastle in Australia. She has extensive experience advising multinational clients in a wide range of industries in terms of tax structuring, cross-border tax issues, tax disputes, and tax compliance matters. She has also advised an impressive list of oil and gas supermajors and IPPs on the tax structuring of their energy projects in Myanmar and has assisted on various tax dispute cases in the oil and gas sectors.

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