ASEAN Regulatory Brief: Work Permits, Tax Filing, Rates and Incentives

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By Nha Huynh

Indonesia: Changes to regulations regarding work permit (IMTA) and temporary stay permit (KITAS)
  • Companies hiring foreign experts are now required to pass an interview at the Ministry of Manpower to get the KPTKA, which is the first step towards obtaining a temporary stay permit and work permit for employees.
  • The suitability of foreign experts for managerial roles will be checked by the Ministry of Manpower including age, qualifications and work experience. However, there is no official requirements set by law, the result may practically vary from case to case.
  • Work permit validity to be shortened to six months rather than one year for foreigners employed by service, trading and consulting companies, as well as those working on machinery installation and maintenance, and those educated to only a high school or vocational level.

Philippines: Income Taxes 2015, changes in filling procedure

In anticipation of the forthcoming Income Tax Return filing deadline on April 15, 2015 for the taxable year 2014, the Philippines Bureau of Internal Revenue (BIR) issued Revenue Regulation (RR) No. 5-2015 on March 15 this year. The Regulation requires all taxpayers to file their returns using either Electronic Filing Payment System (eFPS) or Electronic BIR Forms (eBIRForms).

Those mandated to use eFPS are as follows:

  • Importers and brokers
  • National government agencies
  • Licensed local contractors
  • Enterprise enjoying fiscal incentives
  • Top 5,000 individual taxpayers
  • Corporations with paid up capital of P10 million and above
  • Corporations with complete computerized system
  • Procuring government agencies
  • Government bidders
  • Top 20,000 private corporations.

Those mandated to use eBIRForms are as follows:

  • Accredited tax agents and their clients
  • Accredited printers of receipts and invoices
  • One-time transaction taxpayers
  • Those filing no-payment returns
  • Government corporations
  • Local government units
  • Cooperatives

Taxpayers will need to submit payment with an Authorized Agent Bank, together with an email confirmation Filing Reference Number (FRN). Those who fail to follow the Regulation will face a penalty of PHP 1,000 (US$22.5) per return, in addition to civil penalties equivalent to 25 percent of the tax due.

Myanmar: New tax rates have been announced in The Union Tax Law of 2015

The Union Tax Law of 2015, which came into effect on 2 April, has introduced several significant tax reforms for on foreigners and foreign companies residing in Myanmar. This includes capital gains tax (CGT), commercial tax (CT), corporate income tax (CIT), income tax from property, and personal income tax (PIT).

  • CGT for non-residents will be lowered from 40 to 10 percent, excluding the oil and gas sector.
  • A new CT rate of three percent applies to the construction and sale of buildings.
  • CIT for non-residents are reduced from 35 percent to 25 percent
  • A 10 percent tax is applied to income from leases of land, rental of building and rental of apartment.
  • Non-resident foreigners are now subject to a graduated PIT rate of 0-25 percent, as opposed to the previous 35 percent flat rate. New deductions have been granted, taking into account whether parents or dependents live with the taxpayer.
Malaysia: Guidelines for new tax incentives are announced

Malaysia’s Ministry of International Trade and Industry has released detailed guidance on the four new tax incentives introduced in the 2015, granting several incentives:

  • Newly established companies or those expanding into less developed areas will be granted a corporate income tax exemption of up to 100 percent for periods of up to 15 years.
  • A new incentive for the establishment of principal hub will come into effect on May 1, 2015, replacing the existing International Procurement Centres, Regional Distribution Centres and Operational Headquarters Incentive Schemes, which will be terminated by April 30, 2015. A principal hub company will enjoy tiered rate of tax reductions based on the level of value created, including a zero percent , five percent or ten percent of corporate income tax.
  • A 100% tax exemption on statutory income for five years will be given to those operating in industrial area management, commencing from the date the company goes into operation.
  • A capital allowance will be granted to increase automation in labour-intensive industries.


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