Tax
No personal income tax, and revenue dominated by hydrocarbons
Brunei levies no personal income tax and no VAT or GST. Corporate income tax is charged at 18.5%, with a far higher effective burden on petroleum operations under the Income Tax (Petroleum) Act. The absence of personal and consumption taxes makes hydrocarbon revenue the fiscal foundation, and the petroleum regime is where the substantive tax law lies.
Governing law
- Income Tax Act (Cap. 35) — Corporate income tax at 18.5%.
- Income Tax (Petroleum) Act (Cap. 119) — 55% rate on petroleum operations.
In practice
There is no personal income tax on employment income. Corporate income tax is 18.5% on Brunei-source profits, with partial exemptions for lower profit bands. Petroleum operations are taxed separately at 55% under the Income Tax (Petroleum) Act. There is no VAT, GST, capital gains tax or estate duty. The commonly cited 'no tax' description is accurate for individuals but wrong for corporates and badly wrong for petroleum. Withholding tax applies to certain payments to non-residents, including interest, royalties and technical fees.