Myanmar Crypto Traders Face 10% Capital Gains Tax Amid Surge

In Myanmar, the use of cryptocurrencies such as USDT and BTC has surged due to capital controls, a depreciating kyat, and the exodus of banking services following the February 2021 coup. Despite the Central Bank of Myanmar (CBM) declaring digital assets as illegitimate currency and imposing fines or imprisonment for trading, the Internal Revenue Department (IRD) insists that all income, including crypto gains, must be reported according to Myanmar's income tax and capital gains laws. This creates a complex landscape for crypto traders, miners, and freelancers in Myanmar and beyond.

The IRD, under the Ministry of Planning & Finance, is the primary tax authority. Key legislation includes the Income Tax Law (1974, amended 2019), which covers salaries, business profits, and “other income,” and the Capital-Gains Tax Law (2015), which imposes a 10% flat rate on gains from the disposal of capital assets, including crypto. The Tax Administration Law (2019) allows for a six-year audit window, extending to 12 years for fraud. The CBM's Notification 9/2020 and Public Notice 24 May 2024 declare crypto trades illegal but do not amend tax statutes. In practice, the IRD treats cryptocurrency as an intangible capital asset, similar to shares, with profits falling under capital gains or “other income.”

Myanmar imposes several types of crypto taxes. Capital Gains Tax (CGT) is 10% on net profit when crypto is sold or exchanged for fiat or another asset. Income Tax is progressive, ranging from 1% to 25% on crypto earned from mining rewards, staking/yield incentives, airdrops or hard-fork distributions, and wages, consulting fees, or merchant payments in crypto. Myanmar’s 5% Commercial Tax (CT), analogous to VAT, may apply when crypto directly purchases goods/services, but no specific crypto CT rules exist yet. There are no wealth, gift, or inheritance taxes specific to crypto.

Tax rates and brackets for CGT are flat at 10% for individuals and companies. Personal income tax is progressive, ranging from 1% to 25% on aggregated income, including crypto. Corporate income on crypto trading desks is taxed at the standard 25%. Exemptions and reliefs include a salary income tax-free threshold of MMK 4.8 million per year, but there is no de minimis disposal rule, meaning every crypto gain is reportable. Loss carry-forward is allowed for business taxpayers for three years but not for individuals.

Crypto transactions and their tax treatments vary. Buying and holding crypto with kyat or foreign currency is not taxable until disposal. Selling or spending crypto realizes CGT on the difference between the sale price and cost basis. Mining and staking are taxed as ordinary income on the market value of coins on the day received, with later sales triggering CGT on additional appreciation. Salary or contractor payments in crypto are converted to kyat on the payroll date, with Paye withheld. Crypto-to-crypto swaps are treated as two disposals, each valued in kyat at the Myanmar reference market rate. DeFi lending and yield farming token incentives are considered income, with redeemed interest counting as CGT. NFT mints and trades are taxed similarly, with creators owing income tax on the primary sale and collectors paying CGT on resale gains.

Crypto gains must be reported on Form IT1 (salaried) or IT2 (business) by 30 June after the tax year. Companies must attach a Schedule CG-Crypto to their annual corporate return. Required evidence includes wallet addresses, exchange statements, transaction hashes, and kyat conversions made. The IRD suggests maintaining records for seven years. Delays in filing incur a 10% surcharge and interest, and failure to disclose can result in fines up to 150% of the unpaid tax and prosecution under the Tax Administration Law.

Direct crypto-related expenses, such as electricity for mining rigs, cloud-server rentals, exchange fees, and professional advisory expenses, can be deducted against crypto income by business taxpayers. However, the cost of hardware wallets and VPN subscriptions used for personal investment cannot be deducted. Losses from trading one coin can offset profits from other coins in the same year, with surplus business losses carried to the next three years. Individual investors can only use losses within the tax year, making it crucial to time disposals properly.

The IRD collaborates with the CBM, telecom operators, and police anti-money-laundering units to trace digital-asset flows. Transfers of large amounts of kyats marked as suspicious by banks or mobile-money apps are vetted, and the CBM can freeze associated accounts until an investigation is completed. Blockchain-analytics software clusters wallet addresses and cross-references Facebook/Telegram OTC adverts to real-name users. Exchanges servicing Myanmar IPs are periodically asked for KYC files under double-tax-treaty exchange-of-information powers.

Penalties for non-compliance include administrative fines of 10% to 150% of understated tax plus monthly interest. Knowingly concealing crypto income of MMK 50 million or more can lead to up to three years’ imprisonment under the Anti-Money-Laundering Law. The CBM may close domestic bank accounts and blacklist national registration cards, limiting future financial access. Timely voluntary disclosure before an audit usually reduces fines by two-thirds and averts criminal charges.

A draft Virtual-Asset Service Provider Bill, circulated informally in early 2025, would introduce licensing fees, mandatory transaction reporting, and withholding tax on large OTC swaps. While the junta-controlled CBM leans toward stricter enforcement, opposition groups lobby for a sandbox regime once political conditions stabilize. Either outcome will likely formalize crypto tax treatment and could offer reduced CGT for start-ups that register in Myanmar’s new Special Economic Zones.

In conclusion, Myanmar taxes crypto within its long-standing income and capital gains framework, with 1% to 25% on earnings and 10% on realized gains. Every disposal, swap, reward, or crypto-denominated payment is potentially taxable, and the IRD now wields blockchain forensics to catch non-filers. Keeping meticulous records, applying the correct kyat conversion, and setting aside cash for the April-June filing season are essential. Given the fluid legal environment and severe CBM sanctions, consulting a Myanmar-qualified tax adviser before executing large trades or mining projects is advisable.