The SEZ includes high-tech industrial zones, information and telecommunications technology zones, export processing zones, port area zones, logistics and transportation zones, scientific and technological research and development zones, service business zones, sub-trading zones and zones prescribed by the Government from time to time.
Activities in the SEZ may include investments in:
Production based businesses such as goods processing businesses, hi-tech production businesses, industries, agriculture, livestock breeding and fisheries, mineral produce businesses and forestry produce businesses;
Service businesses such as trading, logistics and transportation, storage,hotel and tourism, education and health, residential quarters, infrastructure supply and support centers, green areas which conserve and protect the natural environment, recreation and resort centers;
Infrastructure construction businesses such as roads, bridges, airports, ports, electricity, communication and water supply, environment conservation and protection and waste control;
Other businesses determined by the Central Body of the SEZL with the approval of the Government.
Investors who invest and operate in the SEZ may apply for the following exemptions and incentives:
An income tax exemption on the proceeds of overseas sales for the first 5-year period from the day of commencement of the production or service;
Fifty percent relief on the income tax rate for the second 5-year period on the proceeds of overseas sales;
After the expiry of the exemptions and relief for the first two 5-year periods, if exemptions and/or relief are not permitted again under the SEZL, the entity shall be subject to the income tax rate stipulated underexisting law. However, 50% relief on the income tax rate stipulated under existing law may be applied for on a third 5-year period, if the profit obtained from export sales is re-invested;
After the expiry of the tax exemptions and relief period for goods processing businesses invested and operated in SEZ, income tax relief for that year may be applied for if the value of the export is:
Greater than 50% of the total value of products in *large scale investment business;
Greater than 60% of the total value of products in *medium scale investment business;
Greater than 70% of the total value of products in *small scale investment business;
An exemption from Commercial Tax on exported items produced in theSEZ;
An exemption from customs duty and other fees applicable to the importation of raw materials and machinery and equipment for export orientated processing enterprises established in the SEZ;
Exemptions from customs duty and other fees for the first 5-year period from commencement of operations, and 50% relief for the next 5-year period, on the importation of machinery and motor vehicles, subject to stipulations, to be used in an investment enterprise.
* Large, Medium and Small are not defined in the SEZL.
For more insight into the workings of the Burmese economy and political climate - be sure to check out our section on Business in Myanmar (Burma).
This article has been prepared by DFDL exclusively for www.MyanmarBurma.com. The information provided in this article is based on our understanding of publicly known Myanmar laws, regulations and official practices as of 21 November 2012 and may be affected by laws that are subsequently adopted by Myanmar Parliament or notifications that are adopted by various ministries. There may also be instances where the unofficial practices applied by the Myanmar Government authorities (including the tax authorities) are not in accordance with or even contradictory to Myanmar law. More importantly, as the decisions of the courts and tax authorities are not made publicly available, it is possible that the tax authorities or the courts will adopt an interpretation of Myanmar laws which is not in accordance with our interpretation.
Further, this article is for information purposes only and is not, and is not intended to be or constitute legal, financial, technical, insurance or tax advice or DFDL’s opinion on any matter, subject or thing and should not form the basis for any decision to enter into, nor is it intended to be a recommendation or similar by DFDL in respect of or under or in connection with, any transaction in Myanmar.
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