The core distinction — income vs transaction
PIT (Personal Income Tax) and Commercial Tax (CT) are both administered by the IRD but do very different jobs. PIT is charged on a natural person's income — salary, business profit (sole proprietor), pension, rental — under the Income Tax Law and the Union Tax Law 2025-2026 (Section 5). Commercial Tax is charged on transactions — supply of goods and services, and imports — under the Commercial Tax Law. They have different bases, different filers, different deadlines, and rarely overlap on the same money.
Step 1 — How PIT applies (the 20% basic personal relief)
For a Myanmar tax resident salary earner, PIT runs through the 20% relief and the 0–25% bands.
| Annual gross salary | (figure) |
| 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 PIT 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% |
Side-by-side comparison:
| Feature | Personal Income Tax (PIT) | Commercial Tax (CT) |
|---|---|---|
| What is taxed | Person's annual income (salary, business, pension, rental) | Sale of goods, supply of services, imports |
| Who is the taxpayer | The individual (employee withheld via employer; freelancer / sole proprietor self-files) | The supplier / importer of goods or services |
| Rate | 0–25% progressive (UTL 2025-2026) | Typically 5% on most services and many goods (sectoral rates vary) |
| Allowance / relief | 20% basic personal relief, dependant allowances, donations | Generally none on rate; some exemptions by goods category |
| Filing rhythm | Monthly PAYE + annual return | Monthly CT return + payment |
| Annual deadline | 30 June (3 months after year-end) | Per CT calendar; usually monthly |
Step 3 — When both might appear in one organisation
- An employer paying salary withholds and remits PIT for its employees.
- The same employer selling services charges Commercial Tax on its invoices and remits the CT separately.
- A freelancer may have PIT on net profit and CT on service supply if turnover exceeds the registration threshold.
- An employee generally never pays CT on their salary — salary is not a taxable transaction under the Commercial Tax Law.
What about SSB and the true net salary?
SSB sits separately from both PIT and CT. SSB is a social-insurance contribution under the Social Security Law 2012 — 2% employee + 3% employer on the MMK 300,000/month wage base (employee max MMK 6,000/month, employer max MMK 9,000/month). It is paid to the Social Security Board, not the IRD. SSB applies to wages, not to the supply of goods or services.
| Authority | Tax / contribution | What it taxes |
| IRD | PIT | Individual income |
| IRD | Commercial Tax | Goods + services transactions |
| Social Security Board | SSB contributions | Wages (capped wage base) |
Employer takeaway
Don't confuse PIT and CT. PIT is a personal income tax on people, withheld by employers via PAYE; CT is a transaction tax charged on the sale of goods and services. An employer typically files both: monthly PAYE for staff (PIT) and a monthly CT return for its sales. Remit PAYE to IRD by the 15th of the following month, file the annual reconciliation by 30 June, and file CT returns on the CT calendar. Retain documents for at least 7 years.
Common variations to watch for
- Sole proprietor — pays PIT on net profit and CT on services if registered.
- Employer importing services from abroad — withholding tax on cross-border services and CT may both apply.
- Sectoral exemptions — some goods are CT-exempt; doesn't change PIT.
- CT registration threshold — small businesses below the turnover threshold may not need to register for CT.
- Mixed personal + business — keep books cleanly separate.
Common PIT mistakes to avoid
- Charging CT on salary — salary is not a CT transaction.
- Filing CT figures on the PAYE return — different forms, different IRD lines.
- Treating CT as a creditable input against PIT — they are separate taxes.
- Forgetting either filing — both attract penalties. See PIT penalties and filing forms.
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