Tax in Brunei

Who is the tax authority?

The Inland Revenue Department (IRD), under the Ministry of Finance and Economy, administers all direct taxes in Brunei. The primary statute is the Income Tax Act (Cap 35).

Brunei does not have a general personal income tax or a VAT/GST system. The IRD therefore focuses almost entirely on corporate income tax and petroleum-sector levies. Customs and Excise collects duties on tobacco, fuel, and motor vehicles separately.

Brunei is a founding member of ASEAN and a member of APEC. The country has signed but not ratified the OECD Multilateral Instrument (MLI). Pillar Two (Global Minimum Tax) has not been adopted domestically — most Brunei MNEs fall below the EUR 750 million revenue threshold.

What is the tax year and when are returns due?

Brunei uses the calendar year (1 January to 31 December) as the tax year. Corporate annual returns are due by 30 June following the end of the accounting year.

Who is a tax resident?

Brunei does not tax individuals on income, so personal tax residency has no direct income-tax consequence for most people. Residency matters primarily for corporate-tax purposes and for TAP (Trust Fund) contribution obligations.

For companies, a corporation is treated as tax-resident if it is incorporated in Brunei or has its management and control exercised in Brunei. Non-resident companies are taxed on Brunei-source income only.

Employed residents contribute to TAP (Brunei's trust fund) at 5% of gross wages, with employers contributing a matching 5%. This is not an income tax — it is a provident-fund contribution.

Personal income tax — none

Brunei imposes no personal income tax on individuals. This places it in the same archetype as GCC states (UAE, Bahrain, Qatar, Kuwait, Oman, Saudi Arabia) and makes it one of only a handful of ASEAN jurisdictions with zero PIT.

For US citizens and green-card holders living in Brunei, the absence of a US-Brunei DTA means the US taxes worldwide income with no treaty-reduced rates or exemptions. A qualified Tax-Adviser familiar with both US and Brunei rules is essential for that scenario.

How does corporate tax work?

Brunei's corporate income tax applies at a tiered rate based on profit level. The standard headline rate is 18.5% — among the lower CIT rates in ASEAN.

Withholding tax on dividends paid to non-residents is 0% under domestic law. Interest withholding is 0% to residents; treaty rules may apply to non-residents. Brunei companies do not face a capital gains tax.

Pillar Two (OECD global minimum tax) has not been transposed into Brunei law. Most Brunei-based MNEs fall below the EUR 750 million revenue threshold that triggers Pillar Two obligations.

Petroleum sector — specialized framework

Brunei's oil and gas sector is taxed under a separate framework distinct from the standard CIT. Petroleum profits are taxed at approximately 55% under a production-sharing arrangement.

Hydrocarbons account for over 60% of Brunei's GDP, so the petroleum framework shapes government revenue far more than the standard CIT. Companies operating in oil and gas should engage a specialist practitioner — the petroleum tax rules are distinct from the Income Tax Act (Cap 35).

Indirect tax — no VAT or GST

Brunei has no value-added tax and no goods-and-services tax. This distinguishes Brunei from most of its ASEAN neighbors — Singapore, Malaysia, Thailand, Vietnam, Indonesia, and the Philippines all apply VAT or GST.

Currency — BND pegged 1:1 with SGD

The Brunei Dollar (BND) is pegged 1:1 with the Singapore Dollar (SGD) under the Currency Interchangeability Agreement in force since 1967. Both currencies circulate freely across both countries at par.

For accounting purposes, companies operating across Brunei and Singapore can invoice, book, and report in either BND or SGD without currency translation differences — a practical advantage for regional structuring.

Sharia — dual legal system

Brunei operates a dual legal system. Civil and common law applies to most commercial and corporate matters. The Sharia Penal Code (Syariah Penal Code Order 2013), fully implemented in 2014, applies to Muslim residents.

For non-Muslim expatriates and foreign-owned entities, the civil-common law framework governs all tax and corporate matters. Consulting a local practitioner who understands both tracks is advisable for any estate, inheritance, or succession planning that touches Brunei assets.

How are cryptoassets treated?

Brunei has no dedicated cryptoasset tax framework. The Autoriti Monetari Brunei Darussalam (AMBD) has issued caution on cryptoassets but has not imposed a formal ban.

What is the treaty network?

Brunei has approximately 20 active bilateral double tax treaties. The network covers major trading partners across Asia, Europe, and the Middle East. There is no US-Brunei DTA — US persons face full US worldwide taxation with no treaty-reduced rates.

Brunei has signed but not ratified the OECD Multilateral Instrument (MLI). Treaty updates for Brunei therefore come through bilateral protocol, not the MLI fast-track. Also note: the Treaty with Cambodia and Tajikistan are among recent additions; Laos was also signed.

Where does Brunei sit in the ASEAN cohort?

Brunei anchors the no-PIT, hydrocarbon-dependent archetype within ASEAN — comparable to GCC states in the Gulf. The ASEAN bloc spans five distinct tax archetypes:

Common pitfalls

Foreign companies and individuals encounter a handful of recurring traps when operating in Brunei:

When to consult a Brunei tax professional

Many routine corporate matters in Brunei are straightforward given the simple rate structure. Some situations benefit from specialist input:

• Your company falls in or near the petroleum sector (activity classification matters)
• Cross-border operations touch Brunei, Malaysia, and Singapore simultaneously
• US persons or entities hold Brunei income (no treaty relief available)
• Estate, succession, or inheritance involves Brunei assets for Muslim residents
• An IRD inquiry, assessment, or audit notice has been received
• Cryptoasset holdings are significant (classification is unsettled)

You can find Brunei-credentialed practitioners through the directory below.

This page provides general information. It is not personal guidance for your specific situation. Tax rules change. Always check current figures on the IRD website or with a qualified Brunei practitioner before filing.