Brunei has a relaxed tax regime which encourages investment into the country and helps develop the economy.
The country currently has one of the lowest corporate tax rates in the Asean region which is fixed at 18.5 per cent. The country’s tax environment is also one of the least complicated and most attractive for investors.
Brunei is also the only Asean country which does not levy personal income tax. It also does not impose tax on sole-proprietorships and partnerships.
There is no personal tax on individuals in Brunei (residents and non-residents). In addition, there are no social security taxes in the country. However, all citizens and permanent residents of the country must contribute five per cent of their salary to the state- managed provident fund called Employees Trust Fund (TAP). All employers will have to contribute the same amount for its employees to the fund.
In addition, all citizens and permanent residents of Brunei must also contribute 3.5 per cent of their salary to the Supplemental Contributory Pension (SCP) scheme. Employers too will have to contribute the same amount to the scheme. However, both the employers’ and employees’ monthly contributions are capped up to a salary of $2,800 per month.
Import duties in the country vary depending on the nature of the goods. In general, basic foodstuffs and goods for industrial use are exempt from import duties. Cigarette and manufactured tobacco are dutiable items and importers will have to pay more than 200 per cent duty for these items.
Brunei has no export duty. The Excise Act covers retail sale of liquor, cigarettes and manufactured tobacco. However, as Brunei prohibits the sale of any form of alcohol, there are no excise duties on alcohol.
Stamp duties are levied on a variety of documents. Certain types of documents attract an ad valorem duty, whereas for other documents, the duty varies with the nature of the documents.
Properties under commercial use are subject to property tax based on the estimated value of the property. The rate is decided by the local municipal board. With effect from January 1, 2013, estate duties have been abolished.
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