TAXATION AND INCENTIVES

Brunei Darussalam is virtually a tax haven with a minimum tax requirement, if any. There are no personal income tax, no export tax, no sales tax, no payroll tax and no manufacturing tax. There are also no taxes for sole proprietorship and partnership businesses. However, minimum taxes are imposed on companies. Even for these, attractive incentives in the form of tax exemption are available for start-up and for growth and expansion as follows : -

• Pioneer Status

Any limited company which have been granted Pioneer Certificate are given the following incentives :-
 - Exemption From Corporate Tax.
The 30% corporate tax is exempted for a pioneer company for a basic period of five to eight years depending on the level of fixed capital expenditure as follows : -

The tax exemption commences on the first day of production and may be extended for another 5 years at one time but not exceeding 11 years.

. Exemption From Taxes On Imported Capital Goods
A pioneer company is also exempted from taxes on imported duties on machinery, equipment component parts. accessories or building structures.
- Exemption From Taxes On Imported Raw Materials
A pioneer company is exempted from taxes on imported raw materials not available or produced in 8runei Darussalam which are intended for the production of the pioneer products .

• Incentives For Foreign Loans
The imposed 20% With-holding tax for interest paid to non-resident lenders may be exempted for any" approved foreign loan " if :-
- The loan is utilized for the purchase of productive equipment;
- The credit facilities are obtained through financial agreement with the foreign lending company;
- The amount of loan is not less than 8$200,000.

• Incentives For Expansion of Established Enterprises
Any company, whose industry has been declared to be an Approved Industry and Products, intending to incur new capital expenditure for the purpose of the manufacture or increased manufacture of an Approved Product may apply for an Expansion Certificate.
To qualify for an Expansion Certificate, the company must incur a new capital expenditure in the purchase of productive equipment exceeding 8$1 million or not less than 8$500,000 and will result in an increase of not less than 30% in value at original cost of all the productive equipment of the company . The productive equipment is intended to increase the production or profitability.
An approved expanding company can be given tax exemption up to a period of five years subject to certain conditions as follows : -

The tax exemption may be extended for another 3 years at one time but not exceeding 15 years in total.