Step-by-step calculation
This walk-through covers a Myanmar tax resident sole proprietor — for example a small retail trader, food-stall owner with TIN, or independent consultant operating as an unincorporated business. Default: single, no dependant allowances claimed, no donations. Brackets are from the Union Tax Law 2025-2026 (Section 5). Tax year: 1 April – 31 March. The sole proprietor and the business are the same legal person — net profit is the proprietor's PIT base.
Step 1 — Apply the 20% basic personal relief on net profit
Compute net profit from the income statement: gross revenue minus cost of sales, operating expenses, depreciation on business assets, interest, and other allowable trading deductions. Apply the 20% basic personal relief on net profit (capped MMK 10,000,000/year), plus dependant allowances.
| Annual gross revenue | (figure) |
| Less: cost of goods sold | − (figure) |
| Less: operating expenses | − (figure) |
| Less: depreciation, interest | − (figure) |
| = Net business profit | (residual) |
| Less: 20% basic personal relief | − up to MMK 10,000,000 |
| Less: spouse / child / parent allowances | 0 in default case |
| Annual taxable income | = residual |
Step 2 — Apply the Union Tax Law 2025-2026 brackets
| Annual taxable income | Marginal rate |
|---|---|
| 1L – 20L (MMK 0 – 2,000,000) | 0% |
| 20L – 100L (MMK 2,000,000 – 10,000,000) | 5% |
| 100L – 300L (MMK 10,000,000 – 30,000,000) | 10% |
| 300L – 500L (MMK 30,000,000 – 50,000,000) | 15% |
| 500L – 700L (MMK 50,000,000 – 70,000,000) | 20% |
| 700L & above (MMK 70,000,000+) | 25% |
Worked illustration — gross revenue MMK 60,000,000, expenses MMK 35,000,000, net profit MMK 25,000,000 (taxable = MMK 20,000,000 after 20% relief on MMK 5M):
| Band | Amount in band (MMK) | Rate | Tax (MMK) |
|---|---|---|---|
| First 2,000,000 | 2,000,000 | 0% | 0 |
| 2,000,001 – 10,000,000 | 8,000,000 | 5% | 400,000 |
| 10,000,001 – 20,000,000 | 10,000,000 | 10% | 1,000,000 |
| Annual PIT (sole proprietor) | MMK 1,400,000 | ||
Step 3 — Convert to quarterly / annual settlement
- Quarterly estimated payments: ~MMK 350,000/quarter against the projected annual PIT.
- Annual return: file by 30 June with full P&L attached.
- Commercial Tax: register and file separately if turnover crosses the threshold.
- PAYE for any employees: sole proprietor still operates PAYE for hired staff.
What about SSB and the true net salary?
The sole proprietor is not an employee of the business and is generally not enrolled as an SSB-contributing employee. However, if the proprietor employs staff, they must register as an employer and contribute 2% employee + 3% employer SSB on staff wages capped at MMK 300,000/month (max MMK 6,000/MMK 9,000 per month respectively).
Employer takeaway
A sole proprietor pays PIT on net business profit. Keep separate books, support every expense with a receipt, apply the 20% basic relief on net profit, run the bands, and settle via quarterly payments and the annual return by 30 June. Operate PAYE for any employees with monthly returns by the 15th of the following month. Register for Commercial Tax if turnover crosses the threshold. Retain books, contracts, and IRD filings for at least 7 years.
Common variations to watch for
- Drawings vs salary — drawings are not deductible; only true business expenses are.
- Mixed personal-business asset — depreciate only the business-use portion.
- Sole proprietor with rental income — combine with business income on the annual return.
- Husband-and-wife business — typically registered to one person; spouse may be paid as employee.
- Business losses — subject to carry-forward rules under the Income Tax Law.
Common PIT mistakes to avoid
- Treating drawings as a deductible expense — they are not.
- Skipping quarterly estimated payments — interest accrues at year-end.
- Forgetting CT registration when turnover exceeds threshold. See PIT vs CT.
- Personal expenses through the business account — IRD will recharacterise. See record retention.
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