Latest Tax Compliance Procedures for Non-Profit Organizations in Myanmar

• Myanmar’s Ministry of Planning, Finance and Industry issued Notification 79 of 2020, which describes the latest tax compliance measures for non-profit organizations.
• Non-profit organizations will need to apply for a tax identification number and income tax exemption certificate from the Director General of the Internal Revenue Department.
• Additionally, these entities will need to comply with prevailing tax requirements, which includes submitting tax returns and maintaining financial records.

On July 27, 2020, Myanmar’s Ministry of Planning, Finance and Industry issued Notification 79 of 2020 (Not 79/2020) regarding the latest tax compliance procedures for non-profit organizations in the country.

Not 79/2020 will come into effect from October 1, 2020, and the regulation defines a non-profit organization as entities that provide social welfare, such as educational programs, healthcare programs, and supporting those impacted by natural disasters.

Investors looking to establish a non-profit organization in the country should seek the help of qualified advisors in ensuring they stay compliant.

Must apply for tax registration

Not 79/2020 stipulates that non-profit organizations must register for a tax number from the Director General of the Internal Revenue Department (IRD) to conduct the tax filings.

Income tax exemptions

Once the tax identification number has been approved, the organization must then apply for income tax exemptions in addition to receiving the recognition that all the donations it receives are considered tax-deductible expenses for its donors.   

The organization will need to provide the following information:

• Bank account details that are associated with the tax identification number;
• A registration certificate by a government agency (if applicable);
• A copy of the organizations’ articles of association; and
• The financial statement from the previous financial year.

The Director General of the IRD will then assess the application under the following criteria:

• The organization was formed with the purpose of conducting non-profit activities, such as providing healthcare programs or supporting people impacted by natural disasters, among others;
• The organizations’ documentation supports its mission as stated previously;
• In the vent of a liquidation, the organization must ensure that the remaining immovable or movable assets are utilized for the purpose of the non-profit activities; and
• Any donations, funds, and assets accumulated by the organization are not to be utilized for the private interests of a member or related party of a member of the organization.

If the organization fulfils all the aforementioned requirements, the Director General will issue the tax exemption certificate. Non-profit entities are reminded that in cases of non-compliance, the Director General has the right to revoke this certificate.

Tax obligation requirements

Non-profit organizations, whether or not they are recognized for tax exemption, must comply with the tax requirements prescribed under the country’s tax laws.

This includes:

• Submission of tax returns;
• Maintenance of financial records (for seven years from the date of the transaction); and
• Notifying the tax office if there are changes to the organization that would affect their tax exemption status.

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