2018文莱税务简报（英文版）

Deloitte International Tax - Brunei Darussalam Highlights 2018

Core Content Overview

This document provides an overview of the international tax framework in Brunei Darussalam, focusing on corporate and personal taxation, as well as other relevant tax aspects such as withholding taxes, incentives, and compliance procedures. It is intended to serve as a reference for businesses and individuals operating in or with Brunei.

Corporate Taxation

Residence

A company is considered resident in Brunei if it is managed and controlled within the country.

Tax Basis

Companies are taxed on income accruing in or derived from Brunei, or received in Brunei from outside the country.

Taxable Income

Taxable income includes:

• Income from trade or business
• Investment income (e.g., dividends, interest, royalties)

Certain income is exempt, such as:

• Dividends from Brunei-resident companies
• Income of specific government and nonprofit organizations

Tax Rates

• Standard corporate tax rate: 18.5%
• Special rate for oil and gas companies: 55%

Tax Credits

• A 15% credit is available for new investment in plant and machinery between 2012 and 2017, with a carry-forward period of two years.
• Credits for salaries and training expenditure are available.
• Export companies may opt to pay tax at a fixed rate of 1% on approved exports.

Withholding Tax

• Dividends: No withholding tax applies.
• Interest: 2.5% withholding tax on payments to nonresidents, unless effectively connected to a permanent establishment (PE).
• Royalties: 10% withholding tax on payments to nonresidents, unless effectively connected to a PE.
• Technical Service Fees: 10% withholding tax on fees for knowledge or information, unless effectively connected to a PE.
• Nonresident Director Remuneration: 10% withholding tax.
• Rent or Movable Property Payments to Nonresidents: 10% withholding tax, unless effectively connected to a PE.

Exemptions

• Companies with revenue under BND 1 million are exempt from corporate tax.

Anti-Avoidance Rules

• The tax authorities may disregard transactions if they are deemed to be for the purpose of tax avoidance.

Compliance

• Tax Year: Calendar year
• Filing: Each company must file a separate return; e-filing via STARS is required.
• Deadline: 30 June of the year following the taxable period.
• Penalties: BND 10,000 fine and up to 12 months imprisonment for failure to file.
• Advance Rulings: Not granted.

Personal Taxation

Tax Basis

Individuals are taxed on income derived from within Brunei, but certain income is exempt under the second schedule of the Income Tax Act.

Residence

An individual is considered a resident if they reside in Brunei and are physically present or employed (not as a director) for 183 days or more in the preceding year.

Taxable Income

• No specific taxable income details are provided for individuals.

Tax Rates

• No explicit personal tax rates are listed, as income is generally exempt.

Withholding Tax

• Nonresident Director Remuneration: 10% withholding tax.
• Other Payments to Nonresidents: 10% withholding tax on rent or payments for movable property, unless effectively connected to a PE.

Social Security

• Local employees must contribute 5% of wages to the Employees' Trust Fund and 3.5% to the Supplemental Contributory Pension.

Other Taxes

Value Added Tax (VAT)

• Brunei does not have a VAT or sales tax system.

Real Property Tax

• A 12% building tax is applied to buildings in Bandar Seri Begawan.

Stamp Duty

• Stamp duties are levied on business documents at fixed or ad valorem rates.

Inheritance/Estate Tax

• No inheritance or estate tax is imposed.

Net Wealth/Net Worth Tax

• No net wealth or net worth tax is levied.

Additional Information

Foreign Exchange

• No foreign exchange controls, but currency movements are monitored.

Accounting Principles

• Public interest entities must use IFRS.
• Non-public interest entities can use accepted Brunei accounting principles.
• As of 1 January 2018, the Brunei Accounting Standard – Non-Public Interest Entities is adopted.

Incentives

• Pioneer industry companies may be eligible for tax exemptions.
• Tax credits for new investments and training are available.

Tax Treaties

• Brunei has 18 tax treaties in place.

Tax Authorities

• Revenue Division under the Ministry of Finance.

Contact

• Hj Zulfariq Zara bin Hj Zainuddin (zzainuddin@deloitte.com)

Disclaimer

• This document provides general information only and does not constitute professional advice. Consult a qualified professional adviser before making decisions.