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Date Post :  12-01-2015

Brunei Darussalam

http://www.kpmg.com/Global/en/services/Tax/regional-tax-centers/asia-pacific-tax-centre/Documents/CountryProfiles/brunei-2014.pdf           

1 Corporate Income Tax

            Corporate income tax : Income tax

            Tax rate : The tax rate for resident and non-resident companies is 20 percent.

            Residence

                        A company, whether incorporated local y or abroad, is considered to be resident in Brunei Darussalam for tax purposes if the control and management of its business are exercised in Brunei Darussalam. The control and management of a company are vested in its directors and a company is normal y regarded as resident in Brunei Darussalam if, among other things, its directors’ meetings are held in Brunei Darussalam.

            Compliance requirements

                        From the 2012 year of assessment, the assessment system is self -assessment.

            Al filing is required to be done online under a system introduced by the Revenue Division of the Ministry of Finance known as The System for Tax Administration and Revenue Services (STARS). STARS was introduced in 2012.

            International withholding tax rates

                        Dividends are not subject to withholding tax in Brunei Darussalam.

            Royalties paid to a non-resident are subject to withholding tax at a rate of 10 percent. This may be reduced under a tax treaty.

Interest payments made to a non-resident are subject to withholding tax at a rate of 15 percent. This may be reduced under a tax treaty.

Other withholding tax rates on payments to non-residents include technical assistance and service fees (20 percent), management fees (20 percent), rent of movable property (10 percent) and director’s remuneration (20 percent).

            Holding rules

            Dividends accruing in, derived from, or received in Brunei Darussalam by a corporation are included in its taxable income, with the exception of dividends received from a corporation taxable in Brunei Darussalam. No tax is deducted at source on dividends paid by a Brunei Darussalam corporation (i.e. Brunei Darussalam does not impose any withholding tax on dividends).

There are currently no dividend stripping rules or participation exemption rules in Brunei Darussalam.

            Tax losses

            Tax losses can be carried forward for six years and the loss offset is not restricted to the same trade. Unabsorbed capital allowances can be carried forward indefinitely, but must be offset against income from the same trade. There is no requirement regarding continuity of ownership of the company.

            Tax consolidation / group relief

            There are no provisions in the existing tax legislation for the filing of group tax returns or group relief.

            Transfer of shares

            Stamp duty is required to be paid for share transfers in accordance with the Stamp Act. This is ad-valorem and is payable at 10 cents for every BND100 or part thereof when the name of the transferee is filed in prior to execution of the transfer; or 30 cents for every BND100 or part thereof when the name of the transferee is not filed in prior to execution of the transfer.

            Transfer of assets

            Stamp duly is applicable for transfer of property. The rate of stamp duty varies depends on the nature of the asset.

            Transfer pricing

            Transactions involving related resident and non-resident entities must be conducted on an arm’s length basis.

            General anti-avoidance

                        There is currently no legislation on general anti-avoidance in Brunei Darussalam.

            As there is no personal income tax in Brunei Darussalam, there are obvious advantages for directors, who are also shareholders, to receive generous salaries and benefits. However, the tax authority will attempt to disallow payments which it considers excessive, as being not wholly and exclusively incurred in producing income.

            R&D incentives

            The Investment Incentive Order, 2001 has a provision for R&D activities to be classified as qualifying activities for pioneer service companies (see below). Under the Income Tax Act, approved R&D expenditure (subject to certain conditions), is al owed as a deduction in deriving chargeable income.

            Other incentives

            Pioneer status is an incentive al owing tax holidays to be granted for between five and 20 years, dependant on certain criteria being met.

            Brunei tax law also provides the following tax incentives:

  • Pioneer industry tax exemption
  • Tax relief for capital expenditure in excess of BND 1 million
  • Withholding tax exemptions for interest on certain loans from non-residents

            Special tax regimes for specific industries or sectors

Special legislation exists in respect of income from petroleum operations, which is taxable under the Income Tax

            Related Business Factors

A locally incorporated Private Limited Company (referred to as a Sendirian Berhad) or a Brunei registered branch of a company incorporated outside Brunei are the legal entities typically used for conducting business in Brunei Darussalam.

2 Income Tax Treaties for the Avoidance of Double Taxation

            In Force time of publication

                        Bahrain                         Japan                Malaysia            Singapore          China                Kuwait                         Oman                United Kingdom Hong Kong         Laos                Pakistan                        Vietnam                        Indonesia

3 Other Taxes

            Excise duty

            The Excise Act covers retail sale of liquor, cigarettes and manufactured tobacco. Importers of cigarettes and manufactured tobacco will have to pay more than 200 percent duty for these items. However, as Brunei Darussalam prohibits the sale of any form of alcohol, there are no excise duties on alcohol.

            Stamp duty

            Stamp duties are levied on a variety of documents. Certain types of documents attract an ad valorem duty, whereas with other documents, the duty varies with the nature of the documents.

            Property taxes

            Properties under commercial use are subject to property tax based on the estimated value of the property. The rate is decided by the local municipal board.

            Estate duty

            With effect from 1 January 2013, estate duties have been abolished.

4 Free Trade Agreements

            In force

                        ASEAN Free Trade Agreements

                        Brunei-Japan Economic Partnership Agreement (BJEPA)

                        ASEAN-Japan Comprehensive Economic Partnership (AJCEP)

                        ASEAN-China Free Trade Area (ACFTA)

                        ASEAN-Korea Free Trade Area (AKFTA)

                        ASEAN-India Free Trade Area (AIFTA)

                        ASEAN-Australia-New Zealand Free Trade Area (AANZFTA)

                        Trans-Pacific Strategic Economic Partnership Agreement (TPSEP/P4)

5 Tax Authority

            Tax authorities

                        Collector of Income Tax, Ministry of Finance

            Tax audit activity

            The tax authority can audit every company annual y. It is the current practice of the Collector of Income Tax to request information and clarification without commencing a formal audit process. It is often the case that such enquiries can be resolved or addressed without the need for a formal audit process. KPMG in Brunei Darussalam is not aware of any company being subject to a formal tax audit.

            Appeals

            All appeals can be made to the Collector of Income Tax. If no agreement can been reached, further appeals can be made at the High Courts of Brunei Darussalam.

            Tax governance

            The Collector of Income Tax expects al companies to pay their share of tax from their business operations in Brunei Darussalam as good corporate citizens.               

Republic of the Union of Myanmar

http://www.charltonsmyanmar.com/myanmar-law/tax-in-myanmar/

Myanmar Tax System

Corporate Tax

A company is resident if it is formed under the Myanmar Companies Act (MCA) or any other laws of Myanmar and where the control, management and decision-making of the company are situated and exercised wholly in Myanmar. Companies registered under the FIL are treated as resident companies.

A ‘non-resident’ company is a company not formed under any of the above laws. Branch offices of foreign companies, which are not registered under the FIL, are deemed to be ‘non-resident’. Non-resident branch companies pay corporate tax at a rate of 35%

Resident companies are taxed on their worldwide income. However, resident companies registered under the FIL are not taxed on income earned outside of Myanmar.  Non-resident companies are taxed only on income from sources within Myanmar.

Companies incorporated in Myanmar under Myanmar Companies Act (Trade/business income and rental income from movable or immovable property) and companies incorporated under the Foreign Investment Law pay corporate tax at a rate of 25%. Tax in Myanmar, Income tax law, commercial tax in Myanmar

The taxable period of a company is the same as its financial year (income year), which is from 1 April to 31 March. Income earned during the financial year is assessed to tax in the assessment year, which is the year following the financial year. Income tax returns must be filed within three months from the end of the income year, i.e. by 30 June after the end of the income year.  Tax returns for capital gains must be filed within one month from the date of disposal of the capital assets. The date of disposal refers to the date of execution of the deed of disposal or the date of delivery of the capital assets, whichever is earlier.

Commercial Tax

There is no VAT system in Myanmar. A commercial tax (Commercial Tax) is imposed on a wide range of goods, imported into or produced in Myanmar, trading sales, and services. The rates of Commercial Tax are set out in various schedules to the Commercial Tax Law introduced on 31 March 1990.

Registration for commercial tax is required when the amount of income from sales and services for an income year is MMK 10 million or more. There is no commercial tax on the export of goods with very few exceptions. These include:-

5% – petroleum crude

8% – natural gas

30% – jade and other precious stone

50% – teak log and teak conversion; and hard wood log and hard wood conversion. (Such as teak, jade, precious stones, oil and natural gas). Services are only subject to commercial tax if they are listed in schedule 7 to the     Commercial Tax Law.

Commercial Tax on imports is collected by the Myanmar Customs Department at the point of importation in the same manner that customs duties are collected. The following documentation is required to be produced when importing goods into Myanmar:-

1.   Import licence / permit

2.   Invoice

3.   Bill of Lading or Air Consignment Note

4.   Packing list

5.   Other Certificates and permits issued by the relevant Government Departments as a condition for Import.

The Government has indicated that it intends to replace the current Commercial Tax regime with a VAT or GST based model. It is anticipated the new model will be introduced by 2018 – 2019. Myanmar has double taxation agreements with the U.K., Singapore, India, Malaysia, Vietnam, Laos, Indonesia and South Korea.

Capital Gains Tax

In Myanmar, capital gains are treated as income and fall within the scope of the Income Tax Law. Capital gains are taxed at a rate of 10% (where the proceeds of all assets disposed exceed MMK 5,000,000) for resident companies and 40% for non-resident companies.

Tax on disposals made by a non-resident foreigner, is to be paid in the same currency as the disposal or transfer transaction.

The rate of capital gains tax on the transfer of shares in oil and gas companies increases with the amount of net profit earned on the transfer. The rates are:-

-   40% (net profit is less than USD100 million)

-    45% (net profit is between USD100 m – USD150m)

-   50% (where net profit exceeds USD150 m)

Excise Duty customs tax

Customs duty is levied under the Customs Tariff of Myanmar (2007) at  rates ranging from 0% to 40%. Most imported goods are subject to import duties. All incoming consignments of goods must be cleared through the Customs Department under an Import Declaration form (CUSDEC – 1). The Import Declaration form is to be accompanied by the following documents:

1.     Import license / permit

2.     Invoice

3.     Bill of Lading or Air Consignment Note

4.     Packing list

5.     Other Certificates and permits issued by the relevant Government Departments as a condition for Import.

Import duty is levied on the tax base, assessable value, which is the sum of Cost Insurance and Freight (C.l.F) value and landing charges of 0.5% of C.I.F. value. Together with customs duty, Commercial tax is levied on the imported goods basing on the landed cost which is the sum of assessable value and import duty. These taxes are collected at the point of entry and the time of clearance.

Excise duty is levied on alcoholic drinks and is collected by the General Administration Department under the Ministry of Home Affairs.

Property Tax

Immoveable property situated in Yangon is subject to certain local property taxes such as general tax, lighting tax, water tax and conservancy tax.

Stamp Duty

Stamp Duty in Myanmar is governmed by the The Myanmar Stamp Act 1899 (as amended from time to time) which prescribes stamp duties for instruments that transfer or create property interests. The relevant stamp duties are as follows:-

Duty payable on the sale of immovable property (outside Yangon) – 5%

Duty payable on the sale of immovable property (inside Yangon) – 7%

 Duty payable on the rental of immovable property (contract for between 1 -3 years) – 1.5% of the value of the lease

Duty payable on the rental of immovable property (contract for more than 3 years) – 5% of the value of the lease

 Duty payable on the sale or transfer of shares – 0.3% of the value of the shares

The Income Tax Law and double tax agreements

The Income Tax Law  provides that if the Government enters into an agreement with any foreign state or international organisation relating to income tax, and if the agreement is notified, the terms of the said agreement will be followed notwithstanding anything to the contrary contained in any other provisions of the Income Tax Law. Tax treaties have been concluded with India, Indonesia, Malaysia, Singapore, Korea (Rep.), Thailand, United Kingdom, Vietnam, Laos and Bangladesh. The treaties with India, Korea (Rep.), Malaysia, Singapore, Thailand, the United Kingdom, Laos and Vietnam have been notified in the Myanmar gazette.

Kingdom of Cambodia 

http://www.kpmg.com/Global/en/services/Tax/regional-tax-centers/asia-pacific-tax-centre/Documents/CountryProfiles/cambodia-2014.pdf

           

 1 Corporate Income Tax

            Corporate income tax

                        Corporate Income Tax (CIT) / Tax on Profit (ToP)

            Tax rate

                        The CIT/ToP tax rate is 20 percent, with the exception of:

  • 30 percent for the profit realized under an oil or natural gas production sharing contract and the exploitation of natural resources including timber, ore, gold and precious stones
  • 0 percent for the profit of Qualified Investment Project (QIP) during the tax exemption period as determined by Council for the Development of Cambodia (CDC).
  • 5 percent on gross premiums received in Cambodia for insurance companies engaged in the insurance or reinsurance of life, property or other risks and 20 percent on non-insurance income of such businesses.

            Minimum Tax

                        Minimum tax is a separate and distinct tax to ToP, and is payable by taxpayers (with certain exceptions) regardless of whether they are in a profit or loss situation. Minimum tax is calculated at 1 percent of annual turnover

            Residence

                        A resident taxpayer is primarily an enterprise that is organized and managed in Cambodia or its principal place of business is Cambodia.

            A non-resident taxpayer is an enterprise that derives Cambodia sourced income, but does not have a place of management in Cambodia. A non-resident taxpayer will be deemed to be a Cambodian resident for tax purposes if it is found to have a permanent establishment in Cambodia.

            Compliance requirements

                        Cambodia has a self -assessment system for the filing of CIT/ToP returns.

            International withholding tax

            Dividends, royalties (including rent and other payments connected with the use of property) and interest paid to a non-rates

                        resident are subject to withholding tax of 14 percent.         

            Holding rules

            Dividends received from resident companies are not subject to income tax. Dividends received from non-resident companies are subject to income tax in Cambodia. However, a credit for tax paid overseas on foreign source income is general y al owed.

            Tax losses

            Losses can be carried forward for a maximum of five years. Tax losses may be forfeited upon a change in ownership of the business or if there is a change in the business activity. Tax losses will also be forfeited in the event a taxpayer is subject to a unilateral tax assessment.           

            Transfer of shares

            Al realized gains (including capital gains) are treated as income. Registration tax (stamp duty) of 0.1 percent applies to the value of shares transferred.

            Transfer of assets

                        Cambodia does not impose a separate tax on capital gains. Gains arising from the disposal of real property and other assets are treated as ordinary income and are therefore subject to tax at the prevailing CIT/ToP rate. 

            Other incentives

            Cambodia provides a number of investment incentives. These incentives are available to all sectors, except those that are included on the “negative list”, and general y include:

  • ToP exemption for up to nine years (specific conditions apply)
  • Accelerated depreciation on manufacturing assets
  • Import duty exemption on production equipment, raw materials and inputs to manufacturing
  • Right to employ foreign labour

            Related Business Factors

                        In general, businesses operate in Cambodia via the following vehicles:

  • Company (“Single Member Private Limited Company” having only one shareholder and ”Private Limited Company” having more than one shareholder);
  • Branch of a company incorporated outside of Cambodia; and
  • Commercial representative office of a company incorporated outside of Cambodia

 2 Income Tax Treaties for the Avoidance of Double Taxation

In Force

Cambodia does not have any bilateral or multilateral international double tax treaties currently in force at the time of writing.

            Negotiated, not yet in force at time of publication

Treaty negotiations are anticipated between Cambodia and a number of the other Association of South-East Asian Nations (ASEAN) countries, including Thailand, ahead of the planned Economic Community in 2015.

 3 Indirect Tax

            Indirect tax : Value Added Tax (VAT)

            Standard rate : The standard rate of VAT is 10 percent.            

            Further information

                        For more detailed indirect tax information across various countries, refer to: KPMG's VAT/GST Essentials

4 Personal Taxation

            Income tax : Personal tax / tax on salary

            Top rate : 20 percent (residents and non-residents)

            Social security             

                        Every month, an employer (with eight or more staff) shall report the number of workers they employ, and pay a contribution of 0.8 percent of the average monthly wage of the workers to the NSSF, by the 15th of the following month.

            Further information

                        For more detailed personal taxation information across various countries, refer to: KPMG’s Thinking Beyond Borders

5 Other Taxes

            Resident withholding tax

            A resident taxpayer is required to withhold tax from certain payments of Cambodian source income to a resident entity, including:

  • Payment for services to a physical person (15 percent)
  • Payments of royalties for intangible assets and interests in minerals, oil, or natural gas (15 percent)*
  • Interest payments (various rates depending on the recipient)
  • Income from rental of moveable or immovable property (10 percent)

 * Interest paid to domestic banks or saving institutions is exempt from withholding tax.

            Patent tax

                        Patent tax is an annual business registration tax which al enterprises carrying on business activities in Cambodia are required to pay by 31 March each year. A “patent tax certificate” wil be issued by the Tax Office upon registration.

            Customs duty

                        Customs duty is levied on certain goods entering Cambodia. The rates vary depending on the type of goods.

Currently, the duty rates are 0 percent, 7 percent, 15 percent, and 35 percent. Exemptions can also be obtained as part of the tax incentives offered in Cambodia.           

            Specific tax regime

                        Specific tax on certain merchandises and services (STCMS) is a form of “excise tax” that applies to the importation or domestic production and supply of certain goods and services, including:

            • Domestic and international telephone services (3 percent)

            • Domestic and international air ticket (10 percent)

            • Entertainment services (10 percent)

            • Cigarettes (15 percent)

            • Cigars (25 percent)

            • Beer (25 percent) 

            Registration tax

            Registration tax (stamp duty) of 0.1 percent applies to a transfer of shares. 0.1 percent registration tax also applies on the government contract value related to the supply of goods/services that are used under the state budget.

Registration tax applies to the following legal documents at a flat rate of KHR1,000,000 (approximately USD250):

            • Company formation

            • Company merger

            • Dissolution of a “Company”

            Tax on unused land

            A tax is levied on unused land and the registered owner of the land is responsible for the payment of the tax. Tax on unused land is based on 2 percent of the market price per square meter as determined by the Committee for the Valuation. Tax on unused land is due to be paid annual y by 30 September. However, unused land that is already declared and ’Tax on immovable property’ (TIP) paid on it, will not be subject to tax on unused land, effective from 2011 onwards.          

            Tax on immovable property (TIP)

            TIP was created in the 2010 Law on Financial Management (LFM) and is imposed on certain immovable properties. The term “immovable property” is defined as land, houses, buildings and construction that are built on the land.

6 Free Trade Agreements

            In force

                        Cambodia is a member of the ASEAN Free Trade Area Trade Agreement

 7 Tax Authority

            Tax authority

                        General Department of Taxation

            Tax audit activity

            A tax audit can be conducted within three years of the date a tax declaration was required to be submitted, or within 10 years of the date the tax declaration was required to be submitted if there is evidence of the “obstruction” of the implementation of tax provisions. The Tax Office defines “obstruction“ very broadly, and the practical reality is that a 10 year time frame for tax audit activity is enforced.

The majority of companies can expect to be audited by the tax authority every two or three years of business operations.

            Appeals

            There is an objection process, but there is no independent tax court or tribunal. Appeals are final y decided by the Tax Office.

Republic of Indonesia

Personal taxation

Income Tax Personal tax

Top Rate The top marginal personal tax rate is 30 percent and applies to taxable income exceeding IDR 500 million.

Social Security Healthcare Insurance, managed by the newly established Healthcare and Social Security Agency (Badan Penyelenggara

Jaminan Sosial Kesehatan or “BPJS Kesehatan”), previously Social Security Agency (Jamsostek), requires the following

contributions:

• Employer’s contribution: 4 percent up to max. IDR 189,000

• Employee’s contribution: 0.5 percent up to max. IDR 23,625 (starting 1 July 2015 onwards this contribution would be

1 percent up to max. IDR 47,250

The above rates are applied to basic salary and fixed allowances up to a maximum of IDR 4,725,000 per month.

We are still waiting for regulations regarding implementation and expatriate participation. The previously issued Minister

of Manpower and Transmigration Regulation No. PER.02/MEN/XII/2004 states that employers do not have an obligation

to register expatriates in Jamsostek as long as the expatriates already have similar coverage in their home country. We

are looking forward to hearing further clarification of whether any similar exemption will be available for the new program

considering that Indonesia does not have a Totalization Agreement (International Social Security Agreement) with any

other country.

Further information For more detailed information regarding the personal taxation matters in Indonesia, refer to:

KPMG’s Thinking Beyond Borders

Ref:

http://en.wikipedia.org/wiki/Taxation_in_Indonesia

http://www.kpmg.com/Global/en/services/Tax/regional-tax-centers/asia-pacific-tax-centre/Documents/CountryProfiles/indonesia-2014.pdf

 

Lao People’s Democratic Republic

This link to all the information about tax laws in Laos:

http://www.kpmg.com/Global/en/services/Tax/regional-tax-centers/asia-pacific-tax-centre/Documents/CountryProfiles/Laos.pdf

Malaysia

This link to all the information about tax laws in Malaysia:

http://www.treasury.gov.my/index.php?option=com_content&view=category&id=437&Itemid=2466&lang=en

http://www.kpmg.com/Global/en/services/Tax/regional-tax-centers/asia-pacific-tax-centre/Documents/CountryProfiles/malaysia-2014.pdf

The Republic of the Philippines

This link to all the informa

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