Before this amendment, there was no de minimis threshold for withholding tax. This posed difficulties in relation to small day-to-day expenses, for which determining the withholding tax was impractical.
The new measure now exempts payments from withholding tax if the total amount of payments (in aggregate) to a recipient within a fiscal year is less than MMK500,000 (approximately U.S. $368).
The de minimis threshold is expected to resolve some of the practical difficulties, but tax professionals have observed that it does not seem to address what happens to earlier payments, made when it was unclear whether the total payments would exceed MMK500,000 within the fiscal year. Taxpayers could potentially withhold a larger amount on later payments if the total payments would exceed MMK500,000, but this could give rise to a question whether the withholding taxes on earlier payments would be regarded as late payments.
Read a March 2017 report prepared by the KPMG member firm in Myanmar
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