Tax Residency in Myanmar
1. Criteria for Determining Tax Residency in Myanmar
According to Section 10 of the Myanmar Income Tax Law, an individual is considered a tax resident in Myanmar if they meet any of the following criteria:
- Physical presence in Myanmar for more than 183 days in a calendar year.
- Domicile in Myanmar, as determined by the Myanmar Citizenship Law.
- Carrying out business or professional activities in Myanmar.
- Having a permanent home in Myanmar.
For companies, tax residency is determined based on the place of incorporation or management and control. A company is considered a tax resident in Myanmar if it is incorporated in Myanmar or if its management and control is exercised in Myanmar.
2. Impact of International Tax Treaties on Tax Residency Criteria
Myanmar has entered into several double taxation agreements (DTAs) with other countries. These DTAs may modify or provide exceptions to the standard criteria for tax residency as defined in domestic law.
For example, the DTA between Myanmar and Thailand provides that an individual is considered a resident of Myanmar if they have a permanent home in Myanmar or if their center of vital interests is in Myanmar. The DTA also includes a tie-breaker rule for individuals who are considered residents of both Myanmar and Thailand under each country's domestic law.
The DTA between Myanmar and Singapore provides that a company is considered a resident of Myanmar if it is managed and controlled in Myanmar. The DTA also includes a provision that allows a company to be considered a resident of both Myanmar and Singapore if it is managed and controlled in both countries.
These treaty-specific modifications aim to provide clarity and prevent double taxation by establishing clear rules for determining tax residency in cases involving cross-border activities. They reflect the mutual agreement between Myanmar and the other country to facilitate tax compliance and enhance economic cooperation.
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