Myanmar to Commercially Tax All Transactions on Yangon Stock Exchange
According to the Securities and Exchange Commission of Myanmar (SECM), all transactions on the soon to be opened Yangon Stock Exchange (YSX) will be commercially taxed.
The new bourse, the first of its kind in Myanmar, is scheduled to be opened in December of this year. The YSX is being developed in partnership with two Japanese firms, the Daiwa Institute of Research Ltd, which holds a 30.25 percent stake, and the Japan Exchange Group, with an 18.75 percent stake. As a result of the opening of the new exchange, all existing over-the-counter (OTC) markets will be made illegal.
The SECM was established in August 2014 in order to oversee the new stock exchange. Its powers are vested in it by the July 2013 SECM Law. The SECM will issue licenses for brokers, consultants, dealers, and underwriters.
Despite the enthusiasm for the new bourse, analysts have warned that Myanmar’s Revenue Department has no prior experience in taxing such an operation. Therefore, investors can most likely expect some growing pains in the short term as the tax authorities settle into their new responsibilities.
In the future, there is the possibility that the tax on transactions could be removed and a range of financial incentives offered to encourage investment. Dr Maung Maung Thein, chair of the SECM and deputy finance minister, explained the situation: “The Union Tax Law was enacted before the stock exchange opened, so it doesn’t mention anything about YSX tax…This means investors will initially have to pay tax. But in the future we plan to amend the law to grant tax exemptions and we are considering other incentives.”
According to the country’s Finance Ministry, transactions on the YSX will not involve any direct cash transactions; instead all transactions will be processed through banks, via the Kanbawza Bank – the expected settlement bank for the exchange. Additionally, transactions higher than 100 million Kyat (~US$77,827) will require the banks involved to inform the financial crime unit and the Central Bank of Myanmar’s anti-money laundering program.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.
Tax, Accounting, and Audit in Vietnam 2014-2015
The first edition of Tax, Accounting, and Audit in Vietnam, published in 2014, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in Vietnam in order to effectively manage and strategically plan their Vietnam operations.
An Introduction to Tax Treaties Throughout Asia
In this issue of Asia Briefing Magazine, we take a look at the various types of trade and tax treaties that exist between Asian nations. These include bilateral investment treaties, double tax treaties and free trade agreements – all of which directly affect businesses operating in Asia.
The 2015 Asia Tax Comparator
In this issue, we compare and contrast the most relevant tax laws applicable for businesses with a presence in Asia. We analyze the different tax rates of 13 jurisdictions in the region, including India, China, Hong Kong, and the 10 member states of ASEAN. We also take a look at some of the most important compliance issues that businesses should be aware of, and conclude by discussing some of the most important tax and finance concerns companies will face when entering Asia.