KEY TAKEAWAY

The obligation to pay income tax on gains arising from the disposal of capital assets, including land, buildings and apartments, is an existing tax requirement under Myanmar’s tax framework. However, the Internal Revenue Department (“IRD”) is now tightening the practical enforcement of this requirement in connection with property registration and procedures for updating ownership records following a transfer (commonly known as name-transfer procedures or name-change procedures).
From September 1, 2026, where a property sale or transfer is submitted for registration or change of ownership, it will require not only the buyer’s income-tax assessment documents but also evidence that the seller has obtained tax clearance in respect of any gain arising from the disposal of the capital asset.

The IRD has also reminded sellers that, where the relevant threshold is exceeded and a gain arises, the applicable income tax must be declared and paid within 30 days from the date of the sale, exchange or transfer.
 

INCOME TAX ON GAINS FROM CAPITAL ASSETS

The IRD announcement sets out the tax treatment applicable to gains arising from the disposal of capital assets.

What is a capital asset?

Capital assets include:

• land, buildings and their respective units;
• vehicles;
• business-related capital assets;
• shares;
• promissory notes and securities; and
• similar contractual documents.

A gain from a capital asset means the gain arising from its sale, exchange or transfer. Transfers by way of inheritance, as well as gifts or donations made out of love and affection without consideration, are excluded.

When must the seller pay tax?

Where the aggregate value of one or more capital assets sold, exchanged or otherwise transferred during a year exceeds MMK 10 million (100 lakhs) and a gain arises, the seller must file the relevant income tax return with the applicable tax office and pay the tax due within 30 days from the date of the sale, exchange or transfer.

HOW IS THE GAIN CALCULATED?

For the sale of houses, land, buildings and apartments, the applicable assessed value is determined by the relevant valuation authority:

The gain is determined by deducting the original(registered) acquisition value and ordinary expenses incurred in connection with the sale, exchange or transfer from the assessed value.

Examples of such expenses include:

• accumulated depreciation (if apply);
• renovation expenses; and
• brokerage commission.

Where a gain remains after these deductions, the gain is subject to income tax at 10%.

TAX CLEARANCE REQUIREMENT FOR PROPERTY TRANSFERS

Effective from 1 September 2026

The IRD has announced that, where the parties proceed with:

•  registration of the transfer of immoveable property agreement at the Deeds Registration Office; or
•  an application for updating ownership record with the Department of Urban and Housing Development or the respective city development committee,

such registration or the application will be processed only where the required tax-clearance evidence relating to the seller’s gain from the capital asset is submitted, together with the buyer’s income-tax assessment evidence.
Accordingly, the seller’s tax position may need to be addressed before or alongside the property registration and name-transfer process, rather than after completion of the transaction.

WHAT BUYERS AND SELLERS SHOULD PREPARE

The IRD has specifically advised buyers and sellers to undertake their respective tax procedures concurrently.

For Sellers

1. Determine whether a taxable gain arises from the disposal of the property.
2. Complete the relevant assessment with the applicable tax office.
3. File the required income tax return and pay the tax due within the prescribed period.
4. Obtain the relevant tax-clearance evidence for the property transaction.

For Buyers

1. Complete the applicable income-source assessment.
2. Prepare the required income-tax assessment documents.
3. Coordinate with the seller to ensure that the seller’s tax-clearance evidence is available for the name-transfer process.

PRACTICAL IMPLICATION FOR PROPERTY TRANSACTIONS

This requirement makes the seller’s tax compliance an important part of the property transfer timeline. Buyers and sellers should therefore consider the tax-assessment and clearance process at an early stage of the transaction to minimize the risk of delay in registration or name transfer.

In particular, sellers should not wait until the tax officer imposes tax on any gain arising from the disposal of the property before addressing their tax position. The IRD has encouraged sellers to undergo the relevant gain assessment while buyers are completing their income-source assessment.

Disclaimer: The information provided in this newsletter is for general informational and educational purposes only and is not intended to be, nor should it be interpreted as, legal advice or a formal legal opinion. No reader should act, or refrain from acting, based on the contents of this update without first seeking professional legal counsel tailored to their specific circumstances and jurisdiction. For comprehensive legal support or specific inquiries regarding your company’s compliance, please contact our team directly at firm@iicole.com .