How can an Umbrella Company Help with Contracting in Myanmar?
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Myanmar. Even better, most are experts in Myanmar and expat tax law, meaning they’ll also help you optimise your earnings in Myanmar.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Can I Organise My Taxes and Work Permit Myself?
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Myanmar.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Myanmar, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Myanmar and your home country can seem like full-time work in itself.
A Contractor’s Guide to Taxes in Myanmar
One of the most consistently challenging aspects of contracting in Myanmar is complying with the country’s tax system. As well as paying tax in Myanmar, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Myanmar
If you’re working in Myanmar under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Myanmar for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Myanmar, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Myanmar through PAYE is left with the prospect of doing everything themselves.
Do you know much about Myanmar Tax Law? Does Myanmar have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Myanmar can range from 0 to 25 percent, and you need to be sure you are placed in the correct tax brackets.
Tax Filing as a Contractor in Myanmar
|When Do You Need to Lodge Your Tax Return?||1 April|
|Tax Filing Deadline||30 June|
|Can you file it online?||Yes, https://www.irdmyanmar.gov.mm/Login.aspx|
How to File Taxes in Myanmar as a Contractor
Individuals who derive only employment income during the tax year are not required to file a personal income tax return. Employers must file an annual salary statement with the tax authorities by 30 June after the end of the tax year. If an individual has deductions and income from other sources, then the following steps for filing tax returns apply:
Step 1: Register for a Taxpayer ID at your nearest tax office.
Step 2: Register for the e-Filing service by filling out this form(link is external).
Step 3: Login to the e-Filing service using your username and password.
Step 4: File your tax return, noting all income from other sources.
Step 5: If you have any tax due, you can choose to pay it by depositing a cheque at your local bank. Alternatively, you can pay the tax via their online payment system. Registration will be required to pay your tax through their system. This involves:
- You must have a Myanmar kyat account with a local bank (e.g. KBZ, AYA, CB Bank etc.)
- Notify the relevant tax office and complete the ‘Registration Form for online payment’ that will be provided to you.
- Send this Registration Form to your local bank.
Myanmar Internal Revenue Department: https://www.irdmyanmar.gov.mm/(link is external)
Tax Figures in Myanmar
|Currency||Myanmar Kyat (MMK)|
|Tax-free Threshold in Myanmar||MMK 2,000,000|
|Income Tax Rates||
The above progressive rates apply to the following categories:
Non-resident foreigners who derive income in Myanmar other than salary income, will be subject to a flat tax rate of 25%.
Non-resident nationals who derive income in Myanmar other than salary income, will be subject to a flat tax rate of 10%.
Tax Residency in Myanmar
When do you become a tax resident in Myanmar
You become a tax resident in Myanmar when:
- They are ‘domiciled’ or has a ‘principle place of abode in Myanmar.
- Foreigners who reside in Myanmar for 183 days or more during a tax year (1 April through 31 March) are considered a resident foreigner.
Does the 183 day rule apply in Myanmar
Am I taxed on my global income in Myanmar
Residents and resident foreigners are taxed on their worldwide income including foreign self-employment and business income.
Non-residents are subject to tax on their Myanmar sourced income only.
Can you set up your own Limited Company in Myanmar?
|How long does it take to set up||14 days|
|How much does it cost||MMK 663,000|
|Is it easy?||Starting a Business Rank: 155 (Source: World Bank)|
Tax Calculator in Myanmar
If you are a contractor and want a calculation on your tax and net retention in Myanmar, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Myanmar
Contractors in Myanmar are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Myanmar umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in Myanmar taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Myanmar tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Myanmar
We work with numerous umbrella companies in Myanmar, many of whom are experts in tax and immigration laws. If you have any questions about tax in Myanmar, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Myanmar work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Myanmar but without the overhead of directly dealing with the Myanmar tax authorities. Get in touch with us today for some reliable advice on tax in Myanmar!
A Contractor’s Guide to Work Permits in Myanmar
Immigration is one of the primary concerns for any contractor hoping to start working in Myanmar. Permanent employees will find it easy to get their Myanmar work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The Myanmar work permit, is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Myanmar is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
How Does an Umbrella Company Work?
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Myanmar (which means avoiding fees, fines, or even worse penalties).
How Can We Help You?
There’s a huge variety of Umbrella Companies with different specialities and advantages in Myanmar. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Myanmar and match contractors with the right company for them. If you’ve already secured a contract in Myanmar, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).