The Myanmar Investment Commission (MIC) has revoked a previous notification regarding the classification of 100% export-oriented enterprises, which are entitled to receive tax breaks.
Notification 8/2024 issued on 5 April took effect immediately and revokes Notification 87/2017 dated 20 November 2017.
Under Notification 87/2017, the MIC classified investment activities as 100% export-oriented if investors exclusively supplied all locally manufactured finished and semi-finished goods to investment enterprises that were entirely export-oriented, with no supply to the domestic market.
Under Section 77(b) of the Myanmar Investment Laws, the MIC may grant such enterprises “exemptions or reliefs from the customs duty or other internal taxes or both on the importation of the raw materials and partially manufactured goods conducted by an export-oriented investment business for the purposes of the manufacture of products for export”.
An investor may claim this incentive “if at least 80% of the income expected to be earned from the investment is in foreign currency from exports”. Additional exemptions available based on excess amounts anticipated to be earned in foreign currency from exports.
Notification 8/2024 does not state what happens to the incentives of existing permit or endorsement holders that were granted the exemption under Notification 87/2017.
Legal experts from DFDL say that by removing the rigid categorization requirements, the move could give the MIC added flexibility to evaluate applications for tax incentives on a case-by-case basis, noting that this would align with the MIC’s aim to encourage foreign currency earnings from exports.