Common use of HORIZONTAL COMMITMENTS Clause in Contracts

HORIZONTAL COMMITMENTS. All Sectors; Except for Hong Kong, China which does not have nationals, for a services supplier of another Party who is natural person of that Party but is not national of that Party in mode 1,2,3,4: unbound All Sectors 3) (a) Commercial presence of foreign service suppliers and/or providers are permitted in accordance with Myanmar Companies Act 1914 , Partnership Act 1932, The Special Companies Act 1950 and the laws amending or replacing such acts, the Myanmar Investment Law (2016), its implementing rules and any notification issued under that law. (b) Incorporation of an enterprise, not involving a state enterprise is to be made under the Myanmar Companies Act 1914. If the investment involves a state enterprise, incorporation 3) (a) According to the Notification No. 51/2017, Non-Resident Foreigner will be subject to a withholding tax as follows; Class of Income - Interest payment for a loan or indebtednes s or a transaction of similar nature or Saving - Royalties for the use of licenses, trademarks, patent rights, etc. Non-resident foreigner 15% 15% (c) Services activities are restricted under section 3 of the State-owned Economic Enterprises Law (1989). However, these activities may be permitted by Cabinet notification according to the section 4 of the said law. Tax Income Tax exemption for promoted sectors may be granted by Myanmar Investment Commission in accordance with the Myanmar Investment Law (2016) based on zoning system. If it is in zone (1), the income tax exemption - Payment by State Organizatio ns, State Enterprises, Developme nt Committees , co- operative societies, foreign companies, foreign enterprises and organization s, local companies and under an existing law for purchase of goods, work performed or supply of services and hiring within the country under a tender, contract, 2.5% Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments for a period of 7 consecutive years including the year of commencement of business, in zone (2), the income tax exemption for a period of 5 consecutive years including the year of commencement of business, and in zone (3), the income tax exemption for a period of 3 consecutive years including the year of commencement of business. quotation or other modes (other than the services mentioned in above items of this table). According to the 2017 Union Taxation Law, paragraph 23, sub- paragraph (a), in respect of the following kind of taxpayer, before the reliefs under section 6 of the Income Tax Law shall be deducted, 25 per cent of income tax shall be assessed on the total net profit income: (ii) other income except income under the salary heading of non-resident foreigner. And under, paragraph 24, in the case of a non- resident foreigner, the reliefs under section 6 and 6-a of the Income Tax Law Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments shall not be deducted in the case of income under the salary heading, income tax shall be assessed on the total income at the tax rates under sub-section (c), section 19 of the 2017 Union Taxation Law. The income tax can be changed due to the Union Taxation Law enacted on a yearly basis. Tax According to the Sections 3 (k) of the Income Tax Law, it prescribes the resident foreigners as follows: (i) in the case of individual, a foreigner who resides in Myanmar for not less than one hundred and eighty- three days during the income year; (ii) in the case of a company, a company formed under the Myanmar Companies Act or any other existing (b) A foreign lawyer may perform service to client in Myanmar but are not (c) The commercial presence of foreign services provider shall be subject to the licensing by the government authorities concerned. (d) According to the Farm- Land Law 2012 and the Transfer of Immoveable Property Restriction Law 1987, the Law Amending the Transfer of Immoveable Property Restriction Law (2005), foreign organizations and persons are not allowed to own land in Myanmar. However, land may be acquired on long term lease, depending on individual circumstance. 4) - Any expatriate engage in joint venture, representative offices or other types of judicial person and/ or

HORIZONTAL COMMITMENTS. All SectorsSectors ; Except for Hong Kong, China which does not have nationals, for For a services service supplier of another Party who is natural person of that Party but is not national of that Party in mode 1,2,3,4: unbound All Sectors 3)unbound (1) As specified in each sector (1) As specified in each sector (2) As specified in each sector (2) As specified in each sector (a) Commercial presence of foreign service suppliers and/or providers are permitted in accordance with Myanmar Companies Act 1914 , Partnership Act 1932, The Special Companies Company Act 1950 and the laws amending or replacing such acts(1950), the Union of Myanmar Foreign Investment Law (20161988), its implementing rules and any notification issued under that lawUnion of Myanmar Citizens’ Investment Law (1994). Under these laws: - (bi) Incorporation 100% Foreign investment , or (ii) Joint Venture with a Myanmar citizen or enterprise with a minimum of an enterprise, not involving a state enterprise 35% equity is to permitted. Form of incorporation can be made partnership or limited company or branch/representative office under the Myanmar Companies Act (1914). If the The proposed investment involves a state enterprise, incorporation may be rejected subject to such (3) (a) According to the Notification No. 51/201741/2010 dated 10-3-2010 issued by the Ministry of Finance and Revenue, Nonthe following kinds of payments to non-Resident Foreigner will be resident foreigners are subject to a withholding tax as follows; Class of Income Non- resident foreigners - Interest payment for a loan or indebtednes s or a transaction of similar nature or Saving Interests 15% - Royalties paid for the use 20% of licenses, trademarks, patent rights, rights etc. Non-resident foreigner 15- Payments made by the 3.5 % 15%State Organizations, Development Committees, Cooperative Societies, Partnership Firms, Companies, Organizations formed and registered under any existing law, for purchasing of goods and receiving executing works under a contract or an a agreement or any consent (c) Services activities are restricted under section 3 According to the Land Nationalization Act 1953 and the Transfer of the State-owned Economic Enterprises Immoveable Property Restriction Law (19891987), foreign organizations and persons are not allowed to own land in Myanmar. State is - Payments made by 3.5% foreign entrepreneur or foreign company for receiving executing works and purchasing of goods locally under a contract or an agreement or any consent According to the Notification No. 115/2006 issued by the Ministry of Finance and Revenue, income tax shall be imposed in foreign currency on non-resident foreigners’ total income at the rate of 35% (thirty five percent) in such foreign currency. However, these activities may be permitted by Cabinet notification according to if the section 4 income is under the heads professional income, business income, property income, undisclosed source of the said law. Tax Income Tax exemption for promoted sectors may be granted by Myanmar Investment Commission in accordance with the Myanmar Investment Law (2016) based on zoning system. If it is in zone (1)income and other source of income, the income tax exemption - Payment by State Organizatio ns, State Enterprises, Developme nt Committees , co- operative societies, foreign companies, foreign enterprises and organization s, local companies and under an existing law for purchase of goods, work performed or supply of services and hiring within calculated at the country under a tender, contract, 2.5% Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments for a period of 7 consecutive years including the year of commencement of business, in zone (2), the income tax exemption for a period of 5 consecutive years including the year of commencement of business, and in zone (3), the income tax exemption for a period of 3 consecutive years including the year of commencement of business. quotation or other modes (other than the services relevant rates mentioned in above items of this the table). According -which ranging from 5% to 40% exceeds the 2017 Union Taxation Lawsum calculated at 35% , paragraph 23, sub- paragraph (a), in respect of then the following kind of taxpayer, before the reliefs under section 6 of the Income Tax Law shall be deducted, 25 per cent greater sum of income tax shall be assessed on the total net profit income: (ii) other income except income under the salary heading of non-resident foreigner. And under, paragraph 24, in the case of a non- resident foreigner, the reliefs under section 6 and 6-a of the Income Tax Law Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments shall not be deducted in the case of income under the salary heading, income tax shall be assessed on the total income at the tax rates under sub-section (c), section 19 of the 2017 Union Taxation Law. The income tax can be changed due to the Union Taxation Law enacted on a yearly basispaid. Tax According to the Sections Section 3 (k) of the Income Tax Law, it prescribes the resident foreigners Resident Foreigners as follows: (i) in the case of individual, a foreigner who resides in in (f) All foreign enterprises and foreign workers shall abide by Myanmar for not less than one hundred and eighty- three days during the income year; (ii) in the case of a company, a company formed under the Myanmar Companies Act or any other existing existing law wholly or partly with foreigner share- holders; (biii) A in the case of an association of persons other than a company, an association formed wholly or partly with foreigners and where the control, management and decision making of its affairs is situated and exercised wholly in the Union of Myanmar. - In this regards, foreign lawyer may perform service to client workers and staffs who working at least one hundred and eighty three days in Myanmar but are not (c) and the foreign enterprises formed in Myanmar may be assumed as the resident foreigners. The commercial presence existing Notification No. 124/2006 by the Ministry of Finance and Revenue determined that the income tax for the resident foreigners earn income in foreign services provider currency under the head "Salaries" shall be subject to paid at the licensing by the government authorities concerned. rate of 15% (dfifteen percent) According to the Farm- Land Law 2012 and the Transfer of Immoveable Property Restriction Law 1987, the Law Amending the Transfer of Immoveable Property Restriction Law (2005), in such foreign organizations and persons are not allowed to own land in Myanmar. However, land may be acquired on long term lease, depending on individual circumstance. 4) - Any expatriate engage in joint venture, representative offices or other types of judicial person and/ orcurrency.