12 Feb 2018
Tax Considerations in Brunei
The Revenue Division under the Ministry of Finance is Brunei’s main tax administrator, with the country ranking 104th out of a ranking of 190 economies in the World Bank’s Doing Business 2018 report on the ease of paying taxes. The principal taxation law is the Income Tax Act and all of Brunei’s tax regulations can be viewed on the website of the Revenue Division.
An overview of the major types of taxes levied in Brunei is provided in the table below. Other taxes may also apply to Hong Kong companies operating in Brunei (e.g. stamp duty and property tax). It should be noted that, however, Brunei has no tax levied on personal income, capital gain and it currently does not charge VAT. Brunei and Hong Kong have entered into a double tax agreement from which Hong Kong companies may be able to benefit.
Corporate Income Tax
A company, whether incorporated locally or abroad, is considered to be resident in Brunei for tax purposes if it exercises control and management of its business in Brunei. A resident company is taxed on its worldwide income. A non-resident company is taxed solely on income sourced in Brunei or on profits from businesses in Brunei operated through a branch or permanent establishment in the country.
Filing of tax assessments must be done through the System for Tax Administration and Revenue Services (STARS) and all registered companies must register with STARS.
For further guidance see the section on Income Tax on the Revenue Division website.
Withholding Tax (WHT)
WHT collection from a non-resident foreigner is obtained through a WHT mechanism, which targets on interests, royalties and consultancy fees, but not dividends. The applicable WHT rates may be reduced where there are tax treaties with Brunei in force.
For further guidance see the webpage on WHT on the Revenue Division website.
10%, 15% or 20%
The Excise Act covers retail sale of liquor, cigarettes and manufactured tobacco, with importers of cigarettes and manufactured tobacco paying more than 200% duty for these imports. As the sale of alcohol is prohibited in Brunei, there is no excise duty on alcohol.
- Regulatory Environment
- Establishing a Presence
- Intellectual Property Protection
- Staff Recruitment
- Tax Considerations
- Import/Export Procedures
- Further Information