Specific Taxes in Brunei Darussalam
Brunei Darussalam, a small but affluent nation on the island of Borneo, imposes a range of specific taxes beyond the standard corporate and personal income taxes. These taxes contribute significantly to the country's revenue and serve various policy objectives.
1. Value-Added Tax (VAT)
VAT is a consumption tax levied on the sale of goods and services. It is a comprehensive tax that applies to most business transactions, including imports and exports. The standard VAT rate in Brunei Darussalam is 7%. However, certain essential goods and services, such as food, medicine, and education, are exempt from VAT.
2. Property Tax
Property tax is an annual tax levied on the ownership of immovable property, including land, buildings, and other structures. The tax is based on the assessed value of the property, which is determined by the government's Valuation and Property Services Department.
3. Environmental Taxes
Brunei Darussalam has implemented a range of environmental taxes to discourage harmful environmental practices and promote sustainable development. These taxes include:
- Carbon Tax: A tax levied on the emission of greenhouse gases, such as carbon dioxide and methane.
- Waste Disposal Tax: A tax levied on the disposal of waste, including hazardous waste.
- Water Pollution Tax: A tax levied on the discharge of pollutants into water bodies.
4. Stamp Duty
Stamp duty is a tax levied on various legal documents and transactions, including property transfers, share transfers, and certain contracts. The rate of stamp duty varies depending on the type of document or transaction.
5. Customs Duties
Customs duties are taxes imposed on imports and exports of goods. The rates of customs duties vary depending on the type of goods being traded.
Taxpayers Subject to Specific Taxes
The taxpayers subject to specific taxes in Brunei Darussalam vary depending on the type of tax.
- VAT: Businesses engaged in the supply of goods and services are liable for VAT.
- Property Tax: Property owners, including individuals, companies, and trusts, are liable for property tax.
- Environmental Taxes: Companies and individuals engaged in activities with environmental impacts, such as manufacturing, waste disposal, and energy production, are liable for environmental taxes.
- Stamp Duty: Parties involved in transactions subject to stamp duty, such as property buyers, shareholders, and parties to contracts, are liable for stamp duty.
- Customs Duties: Importers and exporters engaged in international trade are liable for customs duties.
Purpose and Rationale
The specific taxes imposed in Brunei Darussalam serve various purposes and policy objectives.
- VAT: VAT is a major source of revenue for the government. It also helps to promote economic growth and fiscal stability.
- Property Tax: Property tax contributes to local government budgets and infrastructure development. It also helps regulate property ownership and discourage speculative investment.
- Environmental Taxes: Environmental taxes aim to internalize the costs of environmental damage and encourage sustainable practices. Revenue from these taxes may be used for environmental protection measures and conservation efforts.
- Stamp Duty: Stamp duty revenue contributes to government revenue and may be allocated to various public services and initiatives.
- Customs Duties: Customs duties generate revenue for the government and protect domestic industries by regulating international trade.
Legal Framework
The specific taxes in Brunei Darussalam are established by various legal statutes and regulations. These include:
- Value-Added Tax Order, 2019
- Property Tax Order, 2019
- Environmental Protection and Management Order, 2016
- Stamp Duty Order, 2019
- Customs Order, 2019
These legal texts outline the obligations, rates, and procedures for the collection and enforcement of specific taxes in Brunei Darussalam.
If delving into the depths of Brunei Darussalam's tax rules and regulations isn't your style, and you'd rather have experts take the reins, then Heavnn is here to help.
Let us simplify your tax planning journey in Brunei Darussalam. Access Heavnn's blend of professional expertise and cutting-edge technology by clicking the button below.
