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Borneo Bulletin Yearbook 2020
Companies Act (Chapter 39) or any law in force
elsewhere, usually as a “Sdn Bhd”, “Bhd” or “Pvt
Ltd”, which accrues in, derives from or receives
income in Brunei.
Currently, no tax is levied on unincorporated
companies, personal income and capital gains
from the sale of property or an investment.
Pioneer status companies operating specific
industries, which has been granted pioneer
certificate will be given incentives including tax
holiday from corporate income tax ranging from
five years to 20 years. Other benefits include
exemption from import duties on machinery and
raw materials.
Other notable incentives include tax relief for
capital expenditure in excess of BND1 million
and the withholding of tax exemptions for
interest on certain loans from non-residents.
The country does not levy any indirect taxes
such as value added tax (VAT) or other
consumption based taxes. Property tax is
imposed only on properties for commercial use
with rates determined by the local municipal
board.
Taking advantage of the congenial business
atmosphere in the Sultanate, more and more
foreign companies are choosing Brunei Darussalam
as their preferred investment destination.
The Revenue Division of the Ministry of
Finance and Economy (MoFE) was appointed
to handle the country’s tax administration. The
division continuously reviews and strengthens
the income tax legislations to increase tax
compliance and collection.
Under the Revenue Division, the System for Tax
Administration and Revenue Services (STARS)
was set up as an online tax system. The system
facilitates companies in handling matters related
to taxes such as filing of income tax returns and
payment of corporate income tax online.
Brunei has the least number of taxes in the
region, making it an attractive investment
destination. There are no sales tax, payroll tax,
capital gains tax, manufacturing tax and personal
income tax. Corporate income tax in Brunei is at
18.5 per cent, one of the lowest in the region.
However, companies involved in the exploration
and production of oil and gas receive a tax rate
of 55 per cent.
Newly incorporated companies receive an
exemption for the first BND100,000 chargeable
income during the first three years of assessment.
Additionally, a tax threshold is granted to newly
incorporated and existing companies to reduce
the tax liabilities of small and medium-sized
enterprises (SMEs).
Corporate income Tax is levied on limited
companies incorporated or registered under the
FAVOURABLE TAX SYSTEM