Services

Winding up by Court

Circumstances in which company may be wound up by Court

A company may be wound up by the Court:

• if the company has by special resolution resolved that the company be wound up by the Court;
• if default is made in filing the statutory report or in holding the statutory meeting;
• if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year;
• if the number of members is reduced below one;
• if the company is unable to pay its debts; or
• if the Court is of opinion that it is just and equitable that the company should be wound up.

Voluntary Winding up

Circumstances in which company may be wound up voluntarily

A company may be wound up voluntarily:

• when the period (if any) fixed for the duration of the company by the constitution of the company expires, or the event (if any) occurs on the occurrence of which the constitution provides that the company is to be dissolved, and the company in general meeting has passed a resolution requiring the company to be wound up voluntarily;
• if the company resolves by special resolution that the company be wound up voluntarily; or
• if the company resolves by special resolution to the effect that it cannot by reason of its liabilities continue its business, and that it is advisable to wind up;

Winding up subject to Supervision of Court

Power to order winding up subject to supervision When a company has by special resolution resolved to wind up voluntarily, the Court may make an order that the voluntary winding up shall continue, but subject to such supervision of the Court, and with such liberty for creditors, contributories or others to apply to the Court, and generally on such terms and conditions as the Court thinks just.

Why Do You Need IFRS Reporting Services In Myanmar?

In June 2024, the Myanmar Accountancy Council announced the adoption of the latest versions of IFRS Standards or IFRS for SMEs Standard for financial reporting periods beginning from the 2027–2028 financial year. That is why all companies must report their financial statements in IFRS format.

Component of Financial statements

Financial Statements are the reports that provide the detail of the entity’s financial information including assets, liabilities, equities, incomes and expenses, shareholders’ contribution, cash flow, and other related information during the financial period. Financial statements are used by different stakeholders including the entity's management, shareholders, investors, staffs, major customers, major suppliers, government authority, stock exchanges, and other related stakeholders.

There are five types of financial statements including statement of financial position, statement of comprehensive income, statement of change in equity, statement of cash flow, and the Noted (disclosure) to financial statements.

Statement of Financial Position

Statement of Financial Position may be defined as a statement of Assets, Liabilities and Capital prepared on the last date of the accounting period to show the financial position of the business. The statement of financial position is also known as the Balance Sheet. It is prepared with a view to measure the exact financial position of the business on a certain fixed date.
The functions of balance sheet are as follows:

• It serves as one of the tools management, lenders, and investors use to assess a company’s overall situation. It is easy to understand.
• It shows the total value of assets possessed by business, debts payable to outsiders by the business and capital of the owner in the business.
• It shows the true financial position of a firm at a particular date.
• It indicates the ability of the business to pay its debts and the firm’s ability to meet all its short-term and long-term debts.
• It provides valuable information to the management for making better decisions through ratio analysis.
• It helps in knowing the past and present position of an enterprise.
• It describes the financial position of a business in a systematic standard form. It is a mirror of a business.

Statements of Comprehensive Income Statement

The income statement is one of the financial statements of an entity that reports three main financial information of an entity for a specific period of time. Those information included revenues, expenses, and profit or loss for the period of time.
The functions of income statement are as follows:

• It is a summary of a company's revenues, expenses, gains, losses, and the resulting net income that occurred during a period of time.
• It shows whether a company is making profit or loss for a given period.
• It helps to understand the financial health of the business.
• It serves as an indicator for the business, which shows the performance of the company for the period ending every year or whenever the statement is prepared.
• It is used to summarize the profitability of the company by classification of revenue and expense in the income statement during a period.
• It is primarily focused on the actual operational efficiency of the organization.

Statement of Changes in Equity

It is also referred to as a statement of retained earnings. A statement of change in equity is one of the financial statements that show the shareholder contribution and movement in equity and equity balance at the end of the accounting period.
Information that shows are these statements including classification of share capital, share premium, total share capital, retained earnings, dividend payment, and other related state reserves.

Statement of Cash Flow

A cash flow statement is the financial statement that measures the cash generated or used by a company in a given period. A cash flow statement is a useful addition to the financial statements of a company because accounting profit is not the only indicator of performance. This statement helps users understand how the cash movement in the entity is.
The standard gives the following definitions, the most important of which are cash and cash equivalents.

• Cash comprises cash on hand and demand deposits.
• Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
• Cash flows are inflows and outflows of cash and cash equivalents.
• Operating activities are the principal revenue-producing activities of the entity and other activities that are not investing or financing activities.
• Investing activities are the acquisition and disposal of non-current assets and other investments not included in cash equivalents.
• Financing activities are activities that result in changes in the size and composition of the equity capital and borrowings of the entity.

Role of the Cash Flow Statement or Importance of the Cash Flow Statement

The cash flow statement provides information about the cash inflow (receipts) and cash outflow (payments) of a firm for a given period. The cash flow statement helps to understand liquidity of the business and to prepare the budget. Therefore, cash flow statement is important on the following reasons:

• Cash flow statement helps to identify the sources from where cash inflows have arisen within a particular period and also shows the various activities where in the cash was utilized.
• Cash flow statement is significant to management for proper cash planning and maintaining a proper matching between cash inflows and outflows.
• Cash flow statement shows efficiency of a business in generating cash inflows form its regular operations.
• Cash flow statement reports the amount of cash used during the period in various long-term investing activities, such as purchase of non-current assets.
• Cash flow statement reports the amount of cash received during the period through various financing activities, such as issue of shares, debentures and raising long-term loans.

Noted to Financial Statements

This is the mandatory requirement by IFRS that an entity has to disclose all information that matters to financial statements and help users to have a better understanding. The notes to the financial statements (sometimes called footnotes) are also an integral part of the overall picture. If the income statement, balance sheet, and statement of cash flow are the heart of the financial statements, then the footnotes are the arteries that keep everything connected. The notes are also used to explain further the numbers included in the financial statements, as well as the accounting policies adopted by the company.

Financial Statement Audit that we offer:

• Conformity with applicable rules and regulations
• Advice on controls and processing system weaknesses
• Advice on use of various accounting treatments for complex transactions
• Independent review of externally reported information
• Follow-up in the subsequent cycle of the accounting and auditing process
• Guidance on implementing sound internal-controls and addressing deficiencies and flaws in the accounting process
• Validating if the financial records meet the regulatory framework for IFRS
• Provide the professional advices to reduce the mistake and fraud and error on the financial and operational activities
• Improve efficiency and effectiveness in business operation and process
• Provide appropriate professional advice to get more efficient and effective operation by providing the audit observations and recommendations to the senior management.

Capital Gains Tax “CGT”

Capital assets include land, buildings and their rooms, vehicles, and work-related capital assets. The expression also includes shares, bonds, securities and similar instruments.
If a capital gain from selling, exchanging or transferring by any other means of one or more assets, capital gains tax (“CGT”) shall be levied on the capital gains in kyats or foreign currency.
If the total sale-value of the capital asset; which was sold, exchanged or transferred, does not exceed MMK 10 million, CGT will not be applicable.

Rates of tax on Capital Gain Tax “CGT”

The income tax shall be levied at 10 per cent in kyats or foreign currencies on the capital gains of an individual person or an association of persons except the companies extracting and operating in Myanmar’s oil and gas sector.
If the company operates in Myanmar’s oil and gas sector, the capital gain tax shall be levied in the type of currency earned according to following the tax rates

Returns and assessments

If profits have arisen from selling, exchanging or transferring by any other means of one or more assets, the taxpayers shall file a return of income to the Township Revenue Officer within one month from the date of the sale, exchange or transfers of the capital assets concerned.

Undisclosed source of income

Undisclosed income is the income which the assesse has not shown in his Income Tax Return and thereby not paid income tax on it. The citizen can disclose source for income used for buying, constructing or acquiring any capital assets or establishing a new business or expanding an existing business, the portion of income that source can be proved shall be deducted from the total undisclosed income and the balance of the undisclosed income will be taxed at the progressive rates mentioned in the table below.

Withholding Tax “WT”

The Ministry of Planning and Finance released 47/2018 (“Notification 47/2018”) on 18 June 2018 outlining the new withholding tax (“WHT”) rules that now apply on payments to resident and non-resident taxpayers in Myanmar. The Notification is effective from 1 July 2018 (FY2018-2019). Please refer to below table in relation to payments subject to WHT under Notification 47/2018.

Tax Rate on Commercial Tax

Generally, the rate of commercial tax for both goods and services is 5% on the sale proceeds if the goods are produced and on the landed value if the goods are imported with some exceptions such as:

• 46 types of goods are exempt (examples include food products, agricultural and livestock goods, school and office used goods, certain healthcare products, religious and social goods, transportation goods, industrial goods, defense related goods, gemstone and mineral products and General goods)
• 34 types of services are exempt (examples include foreign affairs sector, defense sector, religious and cultural sector, transportation and communication sector, education and information sector, health sector, planning and finance sector, social welfare, relief and resettlement sector, industry and electricity sector and general sectors)
• MMK 20,000 applicable to the SIM Card Activation
• 15% applicable to the Internet Services
• 3% applicable to the sale of property
• 3% applicable to the hotel and tourism
• 1% applicable to the sale of gold
• 8% on the export of electricity
• 3% on the export of crude oil

Returns and assessments (CT)

Commercial tax returns must be submitted on a quarterly basis and are due within 30 days from the end of the relevant quarter (30 June, 30 September, 31 December and 31 March). Monthly payment of the tax is due by the 10th day of the following month. An annual return must be filed within three months from the end of a fiscal year (30 June).

Specific Goods Tax

Myanmar introduced a Specific Goods Tax (“SGT”), effective from 1 April 2016. It is applicable to specific goods such as tobacco products, alcohol, wine, beer, logs and different types of timber, vehicles and petroleum products. SGT rates are announced on a yearly basis in the Union Tax Law. Please refer to current SGT rates imposed on local production and importation as per the Union Tax Law.
SGT does not applicable on the export earning except for exporting of logs and different types of timber. The law provides certain regulations for the offset of input and output commercial tax.

Returns and assessments (SGT)

SGT must be paid within 10 days after the end of the relevance month in which the goods are sold/ exported. The SGT return must be filed quarterly within 10 days from the end of the relevant quarter (30 June, 30 September, 31 December and 31 March).

SGT exemptions

The local production of tobacco, cheroots and cigars that does not exceed the minimum threshold of MMK 20,000,000, there is paid for specific goods.

Tax reliefs and allowances for Myanmar residents

• Basic allowance of 20% of annual salary income, up to a maximum of MMK10,000,000
• MMK500,000 per annum for each child living with the taxpayer who fulfills ALL of the following criteria:
  • is unmarried;
  • is not earning assessable income; and
  • is either under 18, or if 18 or over, is in full-time education
• MMK1,000,000 for one non-working spouse who is living with the taxpayer
• MMK1,000,000 per parent for dependent parents living with the taxpayer. The term “parent” includes a father- or mother-in-law
• Premiums paid for the life insurance of the taxpayer and taxpayer’s spouse
• Social security contributions made by employees to the Social Security Board (2% of annual salary, capped at MMK 72,000)

Tax Rate

The tax rates for resident and non-resident employees are at the same progressive rates.

How we can help

Our Corporate Tax Planning & Compliance team has the breadth of knowledge and in-depth experience necessary to assist companies in meeting their tax compliance obligations in an effective, cost-efficient manner — with a sharp focus on identifying legitimate tax savings opportunities and adopting defensible tax treatments/positions.

Our services

• Designing and implementing tax governance framework
• Preparing and submitting the tax returns and computations
• Identifying and managing tax risks areas
• Identifying tax incentive opportunities to optimize tax benefits
• Applying for advance tax rulings
• Attending to regulators' queries and addressing tax issues and disputes
• Assisting with tax audit reviews
• Appealing for tax issues and disputes

Why Do You Need IFRS Training?

In June 2024, the Myanmar Accountancy Council announced the adoption of the latest versions of IFRS Standards or IFRS for SMEs Standard for financial reporting periods beginning from the 2027–2028 financial year. That is why all companies try to report their financial statements in IFRS format.

Component of Financial statements

Financial Statements are the reports that provide the detail of the entity’s financial information including assets, liabilities, equities, incomes and expenses, shareholders’ contribution, cash flow, and other related information during the financial period. Financial statements are used by different stakeholders including the entity's management, shareholders, investors, staff, major customers, major suppliers, government authority, stock exchanges, and other related stakeholders for various purposes.

Training Plan

IFRS Financial Reporting course will cover most of the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS). The course consists of conceptual framework of various IAS and IFRS standards, and objective recognition criteria, measurement bases, disclosures etc of all specific IASs and IFRSs. The course aims at providing a clear understanding on the global accounting standards of IASs and IFRSs. Anyone interested to equip in latest global accounting standards will find this course helpful.
This course is delivered by our seasoned trainers who have vast experience as expert professionals in the respective fields of practice in Myanmar. The course is taught through a mix of practical activities, theory and case studies.

Our Objectives

As a result of completing this programme, all participants will improve their knowledge, understanding and analytical skills in terms of the following benefits:

• Understanding the role of financial reporting
• Understanding the current and potential future requirements of IFRS
• Applying standards in accordance with their requirements in terms of preparing IFRS compliant financial statements, including the selection of appropriate accounting policies and related disclosures
• Understanding the recognition, measurement bases, and disclosures of IFRS and IAS standards
• Guaranteed Professional Development on continues basis and Boost your CV
• Offer flexible training to suit your requirements
• Job hunting tips
• Regular progress assessment

Who should attend?

• Part Qualified, Recently Qualified Accountancy students
• Students studying accounting at university
• Lack or low of experience staff in accounting field
• Staff currently studying or intending to study the accounting or want to refresh knowledge on accounting
• Staff who are already working in the business but want to gain detailed knowledge about accounting
• Thinking of providing the outsource accounting services
• Have limited or no knowledge of accounting and want to increase understanding of the primary principles
• Working professional accountants who need to update IFRS revised standards
• Controller for finance department but not directly responsible for their job descriptions
• Small business owners (SME)
• Peoples who want to introduce systematic account process and flows and concepts