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TAX EXEMPTIONS AT A GLANCE
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No Personal Income Tax
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No Sales Tax
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No Payroll Tax
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No Export Tax
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No Manufacturing Tax
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No Capital Gains Tax
TAX INCENTIVES AT A GLANCE
Pioneer Status Companies
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Exempt from Corporate Income Tax
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Exempt from import duties on machinery
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Exempt from import duties on raw materials
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Tax exemption for up to 11 years
Expansion of Established Enterprise
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Exempt from Corporate Income Tax
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Minimum capital expenditure of US$650,000.00
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Tax exemption up to 20 years
Foreign Loans for Productive Equipment
Scope Of Income Tax
A company resident in Brunei Darussalam is liable to income tax on its income derived from or accrued in Brunei Darussalam or received from overseas. A non-resident company is only taxed on its income arising in Brunei Darussalam.
Companies are subject to tax on the following types of income:
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Gains of profits from any trade, business or vocation
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Dividends received from companies not previously assessed for tax in Brunei Darussalam
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Interest and discounts
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Rents, royalties, premiums, and any other profits arising from properties.
There is no capital gains tax. However, where the Collector of Income Tax can establish that the gains form part of the normal trading activities, they become taxable as revenue gains.
Tax Rates
A new tax threshold has been introduced to reduce tax liabilities of SMEs. Tax on the first $100,000 of Chargeable Income is computed as
follows:
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Threshold
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Financial
period from
01.01.2009 to 31.12.2009
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Financial
period from
01.01.2010 to 31.12.2010
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Threshold
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Tax
Rate
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Threshold
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Tax
Rate
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25%
of Chargeable Income
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For
the first B$50,000
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23.5%
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For
the first B$100,000
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22%
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50%
of Chargeable Income
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For
the next B$50,000
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23.5%
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For
the next B$150,000
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22%
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100%
of Chargeable Income
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For
amount above B$100,000
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23.5%
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For
amount above B$250,000
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22%
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For newly incorporated companies in Brunei Darussalam, exemption will be granted for the first B$100,000 of the Chargeable Income of the company during the first 3 consecutive Years of Assessment falling within or after Year of Assessment 2008. The Chargeable Income above B$100,000 shall be charged with tax at the above applicable rate.
Taxable Income
The taxable profit or loss of a company as per its accounts is adjusted for income tax purposes to take into account certain allowable expenses, certain expenses prohibited from deduction, wear and tear allowances and any losses brought forward from previous years in order to arrive at taxable profits.
Concept of Residence
A company, whether incorporated locally or overseas, is considered as resident in Brunei Darussalam for tax purposes if the control and management of its business is exercised in Brunei Darussalam. The control and management of a company is vested in its directors and a company is normally regarded as resident in Brunei Darussalam if, among other things, its Directors’ meetings are held in Brunei Darussalam.
Treatment of Dividends
Dividends accruing in, derived from or received in Brunei Darussalam by a corporation are included in taxable income, apart from dividends received from a corporation taxable in Brunei Darussalam (which are excluded). No tax is deducted at source on dividends paid by a Brunei Darussalam corporation.
Dividends received in Brunei Darussalam from United Kingdom or Commonwealth countries are grossed-up in the tax computation and credit is claimed against the Brunei Darussalam tax liability for tax suffered either under the double tax treaty with the United Kingdom or the provision for Commonwealth tax relief. Any other dividends are included net in the tax computation and no foreign tax is available.
Brunei Darussalam does not impose any withholding tax on dividends.
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