BBYB 2021

Borneo Bulletin Yearbook 2021

Brunei Darussalam has the least number of taxes in

the region. There is no tax on sales, payroll, capital

gains, manufacturing and personal income.

In terms of corporate income tax, the rate in

Brunei is 18.5 per cent, one of the lowest in the

region. Companies involved in the exploration and

production of oil and gas receive a tax rate of 55

per cent.

Corporate income tax is levied on limited companies

incorporated or registered under the 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.

Exemption is granted to newly incorporated

companies for the rst BND100,000 chargeable

income during the rst three consecutive years

of assessment falling within or after year of

assessment 2008.

Additionally, a tax threshold is granted to both

newly incorporated and existing companies to

reduce the tax liabilities of small and medium-sized

enterprises (SMEs). Unincorporated companies –

sole proprietorships or partnerships registered as

business names – are not subject to income tax.

Companies that have been granted a pioneer

certi cate in certain industries and products will

receive a tax relief period between ve to 20 years,

depending on the conditions. Pioneer companies

are exempt from income tax, as well as 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. It also has no export duty. Properties

for commercial use are subject to property tax with

rates determined by the local municipal board.

The Revenue Division of the Ministry of Finance and

Economy (MoFE) is in charge of Brunei Darussalam’s

tax administration. In April 2012, the System for Tax

Administration and Revenue Services (STARS) was

of cially rolled out, a self-service online tax system

for taxpayers and tax professionals.

The online systems allow companies to le income

tax returns and pay corporate income tax online,

among others.

Registration can be made online at www.stars.

gov.bn

With a favourable tax system, Brunei is

increasingly becoming the preferred investment

destination for foreign companies.

FAVOURABLE TAX SYSTEM