Brunei Corporate Tax Guide 2026

Overview — Corporate Tax in Brunei

Corporate income tax in Brunei is governed by the Income Tax Act (Chapter 35) and administered by the Brunei Economic Development Board's (BEDB) Revenue Division (soon to transition to the Inland Revenue Authority of Brunei Darussalam). A company is tax resident if it is incorporated in Brunei or if its place of effective management is in Brunei. Resident companies are taxed on income accruing in or derived from Brunei, as well as foreign income remitted to Brunei. Non-resident companies are taxed only on Brunei-source income. The standard CIT rate is 18.5%, which is competitive within the ASEAN region. There are no provincial or state-level corporate taxes.

Standard Corporate Tax Rate — 18.5%

The standard CIT rate for resident and non-resident companies in Brunei is 18.5% of chargeable income. Taxable income is computed as gross revenue less allowable deductions including operating expenses, capital allowances (depreciation), and losses carried forward. Interest expenses are generally deductible subject to general anti-avoidance rules. Losses may be carried forward indefinitely (no time limit), though loss utilisation may be restricted on changes in shareholding. Capital allowances are available on qualifying fixed assets at prescribed rates (e.g., plant and machinery 10–20%, computers 33.3%). There is no thin capitalisation rule, no CFC regime, and no transfer pricing legislation (though arm's length principle is expected).

Tax Incentives & Reduced Rates

Brunei offers several tax incentive schemes to promote investment in priority sectors:

• Pioneer Industry Status — tax exemption for 5–11 years for qualifying activities (manufacturing, high-tech, research)
• Pioneer Services Company — tax exemption for 5–8 years for qualifying services (IT, logistics, tourism, financial)
• International Trading Company — reduced CIT rate of 8% or 10% for qualifying international trading operations
• International Islamic Bank — reduced rate of 8% for qualifying operations
• Investment Incentive Order — investment tax allowance of up to 60% of capital expenditure

These incentives are administered by the Brunei Economic Development Board (BEDB) and must be applied for before commencing the qualifying activity. The Ministry of Finance and Economy approves all incentive applications.

No Capital Gains Tax

Brunei does not impose capital gains tax on companies or individuals. Gains from the disposal of capital assets (shares, property, business assets, investments) are not subject to tax. This is a significant advantage for corporate investment and restructuring. The absence of CGT means companies can realise gains on asset disposals without tax consequences. However, gains from trading activities (where assets are held as stock-in-trade) may be treated as ordinary income subject to CIT at 18.5%. The distinction between capital gains and trading income follows general tax principles based on the taxpayer's business activities and intentions.

Filing & Compliance

Companies in Brunei must file an annual corporate tax return within 3 months of the end of their accounting period (unless an extension is granted). For companies using the calendar year, the return is due by 31 March of the following year. The return must be accompanied by audited financial statements (unless exempt) and a tax computation. Payment of tax is due at the time of filing. There is no self-assessment system — the tax authority issues an assessment based on the return filed. Late filing penalties apply: a penalty of BND 300 may be imposed for late returns, and additional penalties for non-compliance including 5% of tax assessed. The tax authority has powers to conduct audits and request documents.

FAQs

What is the CIT rate for non-resident companies?

Non-resident companies with a permanent establishment in Brunei are taxed at the same 18.5% rate on Brunei-source income. Non-residents without a PE are subject to withholding tax on certain payments.

Are dividends taxable in the hands of shareholders?

No, Brunei does not impose withholding tax on dividends paid by Brunei companies. Dividend income received by shareholders is not subject to tax. There is also no withholding tax on interest or royalty payments to non-residents.

Can losses be carried forward?

Yes, unrelieved business losses can be carried forward indefinitely. However, a change in shareholding of more than 50% may restrict loss utilisation unless the same business continues.

Disclaimer

This guide provides general information about Bruneian corporate tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified tax advisor or the Brunei Ministry of Finance and Economy for advice specific to your situation. InvestmentKit does not provide tax advice.