Brunei VAT Guide 2026

Overview — No VAT/GST in Brunei

Brunei remains one of the few countries without a broad-based consumption tax. The government has consistently maintained that it does not intend to introduce VAT or GST, relying instead on revenue from oil and gas exports, corporate income tax, and customs duties. The absence of VAT means no cascading tax on business inputs, no VAT registration thresholds, no VAT returns, and no VAT audits. For businesses operating in Brunei, this simplifies accounting and reduces compliance costs significantly. However, businesses must still comply with customs duties on imported goods and sector-specific excise taxes.

Customs Duties on Imports

While Brunei has no VAT, it imposes customs duties on selected imported goods. The Royal Customs and Excise Department (RCED) administers customs duties under the Customs Order, 2006. Most goods imported into Brunei are duty-free, but certain categories attract duties:

• Alcoholic beverages — high specific duties (subject to import licensing)
• Tobacco products — excise duties at high rates
• Motor vehicles — customs duty typically 20% of CIF value
• Petroleum products — specific duties on fuel imports
• Precious metals & jewellery — duty may apply

Most other goods including machinery, electronics, food, clothing, and consumer goods enter Brunei duty-free. Brunei is a member of ASEAN and applies ASEAN Trade in Goods Agreement (ATIGA) preferential rates for goods originating from other ASEAN member states. Goods from ASEAN countries typically enjoy 0–5% duty rates.

Tourism Levy & Service Tax

Brunei imposes a tourism levy on hotel accommodations and certain hospitality services. The levy is BND 5 per room per night for foreign visitors, collected by hotels and remitted to the government. There is no broad-based services tax or sales tax on services. Professional services, consulting, legal fees, accounting fees, and other business services are not subject to any indirect tax. The tourism levy is the closest Brunei has to a consumption tax and is limited to the hospitality sector affecting foreign tourists.

Other Indirect Taxes

Brunei has a limited number of other indirect taxes and levies:

• Excise duties — on tobacco, alcohol, and petroleum products (specific rates per unit)
• Import licensing fees — for controlled goods (alcohol, tobacco, pharmaceuticals, firearms)
• Vehicle registration tax — one-time fee on vehicle registration
• Stamp duty — on legal documents and property transfers (separate guide)
• Land rent — annual nominal rent on leasehold land from the government

None of these constitute a VAT or broad-based consumption tax. The total indirect tax burden in Brunei is among the lowest in the world.

Business Implications of No VAT

The absence of VAT in Brunei has several implications for businesses. There is no need to register for VAT, no VAT invoices, no input tax recovery, and no VAT returns. Businesses purchase goods and services without embedded VAT, which reduces costs. Exports from Brunei are not subject to VAT zero-rating (there is no VAT to zero-rate). Imported goods enter at CIF value plus customs duty only. For businesses operating across borders, the lack of VAT means no cash flow impact from input VAT recovery delays. However, businesses in Brunei may incur irrecoverable VAT/GST when purchasing goods and services from countries that impose VAT (e.g., Singapore GST 9%, Malaysia SST/VAT).

FAQs

Will Brunei introduce VAT in the future?

The government has stated it has no current plans to introduce VAT or GST. However, as oil and gas revenues fluctuate, indirect tax reform may be considered in the long term. No timeline or proposal is currently under discussion.

Do I charge tax on my sales as a business in Brunei?

No, businesses in Brunei do not charge any VAT, sales tax, or service tax on their sales. Prices are quoted exclusive of indirect tax.

Are imports into Brunei subject to VAT?

No, imports are only subject to customs duties where applicable. There is no VAT on importation. The duty rates vary by product category.

Disclaimer

This guide provides general information about Brunei consumption 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.