Brunei Darussalam has a unique tax system compared to many other countries. Notably, Brunei does not have a personal income tax. However, employers and employees both have certain obligations related to social security contributions and other levies. Understanding these obligations is crucial for businesses operating in Brunei to ensure compliance and avoid penalties. This guide provides an overview of employer tax obligations and employee tax deductions in Brunei Darussalam for 2025.
Employer Social Security and Payroll Tax Obligations
In Brunei, employers are required to make contributions to the Employees Trust Fund (TAP) and Supplemental Contributory Pension (SCP) schemes. These schemes provide social security benefits to employees upon retirement.
- TAP (Employees Trust Fund): All Brunei citizens and permanent residents employed in Brunei are required to contribute to TAP.
- The contribution rate is 5% of the employee's monthly salary, payable by the employer.
- SCP (Supplemental Contributory Pension): This is an additional pension scheme supplementing TAP.
- Both the employer and employee contribute to SCP.
- The contribution rate is 3.5% of the employee's monthly salary, payable by both the employer and the employee.
| Contribution | Rate (Employer) | Rate (Employee) |
|---|---|---|
| TAP | 5% | 0% |
| SCP | 3.5% | 3.5% |
Income Tax Withholding Requirements
Brunei does not have a personal income tax system, so employers are not required to withhold income tax from employee salaries. However, it's important to stay updated on any potential changes to the tax laws.
Employee Tax Deductions and Allowances
Since there is no income tax in Brunei, there are no standard income tax deductions or allowances for employees. The contributions to SCP are not considered tax deductions, but rather mandatory contributions to a pension scheme.
Tax Compliance and Reporting Deadlines
Employers are responsible for remitting TAP and SCP contributions to the relevant authorities on a monthly basis.
- Payment Deadline: Contributions must be paid by the 15th of the following month.
- Reporting: Employers must submit contribution reports along with their payments, detailing the contributions made for each employee.
Failure to comply with these deadlines may result in penalties and interest charges.
Special Tax Considerations for Foreign Workers and Companies
While Brunei does not have income tax, foreign companies and workers should be aware of other potential taxes and levies.
- Corporate Tax: Companies operating in Brunei are subject to corporate income tax on their profits. The corporate tax rate is 18.5%.
- Withholding Tax on Payments to Non-Residents: Payments made to non-resident companies or individuals may be subject to withholding tax. The rates vary depending on the nature of the payment and the recipient's country of residence.
- Stamp Duty: Stamp duty is payable on certain documents and transactions, such as property transfers and leases.
- Import Duties: Import duties are levied on certain goods imported into Brunei.
Foreign workers are subject to the same TAP and SCP contribution requirements as Brunei citizens and permanent residents. It is crucial for foreign companies to understand these obligations to ensure compliance with Brunei's employment laws.
