This Brunei tax guide covers the rules in force from 1 January 2026. Brunei levies no personal income tax, no VAT, no capital gains tax and no inheritance, gift or wealth tax. Only companies pay income tax — 18.5%, reduced on the first BND 250,000 (~$195,700) of profit and waived for companies with turnover up to BND 1 million (~$783,000). Dividends carry 0% withholding. Two changes matter now: foreigners are limited to leasehold property since 1 August 2025, and an EU-driven reform of foreign income taxation is pending.
Introduction
Brunei Darussalam is a small sultanate on the north coast of Borneo, split in two by the Malaysian state of Sarawak, with around 460,000 inhabitants. It is an absolute monarchy: Sultan Hassanal Bolkiah, on the throne since 1967, is also Prime Minister, Minister of Defence and Minister of Finance, and there is no elected parliament. Islam is the state religion; civil and commercial law follows English common law, with a Syariah Penal Code alongside it since 2014 (fully in force from 2019). Brunei belongs to ASEAN, CPTPP and RCEP. Malay is the official language, English is common in business, and the climate is hot and humid all year. Oil and gas dominate output and exports and fund subsidised fuel and free healthcare and education for citizens. Alcohol sales are prohibited. Living costs are well below Singapore, whose dollar circulates at par with the Brunei dollar.
For internationally mobile investors, this Brunei tax guide matters because the sultanate is one of the few places where individuals pay no tax at all on salaries, dividends, interest or gains, and there is no VAT either. The corporate rate is moderate — 18.5%, against 24% in Malaysia and 17% in Singapore — and small companies pay far less thanks to threshold relief. The catches are access and direction of travel: there is no investor or retirement visa, foreigners lost access to freehold land when the Land Code (Amendment) Order 2025 took effect on 1 August 2025, and an EU-requested reform of the foreign-source income exemption is expected to apply retroactively from 1 January 2026.
Direct Taxes
Brunei’s Income Tax Act (Cap. 35) applies only to companies — those incorporated under the Companies Act and registered foreign companies. Individuals, resident or not, pay no income tax on any income, and sole proprietorships and partnerships registered as business names are outside the charge too. A company is resident if its control and management are exercised in Brunei. Companies are taxed on Brunei-source income and on foreign income received in Brunei; foreign income kept offshore is not taxed. That remittance basis is the key concept for investors — and exactly what the EU has asked Brunei to tighten.
Personal income tax (2026 bands)
| Chargeable income (BND, USD) | Rate |
|---|---|
| Any amount — employment, business, investment or pension income | 0% |
| Non-resident individuals — Brunei-source income | 0% |
There are no bands because there is no personal income tax: nothing is withheld from salaries and individuals file no return. Expatriate employees are also outside the national retirement scheme, so gross pay is effectively net pay. The one exception is non-resident directors, whose fees from a Brunei company suffer 10% withholding.
Corporate income tax
| Item | Rate |
|---|---|
| Standard corporate income tax (resident and non-resident companies) | 18.5% |
| First BND 100,000 (~$78,300) of chargeable income | 4.625% (25% of the standard rate) |
| Next BND 150,000 (~$117,400) of chargeable income | 9.25% (50% of the standard rate) |
| New companies — first BND 100,000 (~$78,300), first three years of assessment | 0% |
| Companies with turnover up to BND 1 million (~$783,000) | Exempt |
| Approved exports (local sales ≤20% of turnover) | 1% flat, in lieu of CIT |
| Pioneer status (Investment Incentives Order 2001) | 0% during relief period; post-pioneer ≥10% |
| Oil and gas exploration and production | 55% |
The 18.5% rate has applied since Year of Assessment 2015, down from 30% before 2008. With threshold relief, a company with chargeable income of BND 250,000 (~$195,700) pays BND 18,500 (~$14,500) — an effective 7.4%. Brunei has not legislated Pillar Two (no income inclusion rule, UTPR or domestic top-up tax), so groups above the €750m (~$860m) threshold may see Brunei profits topped up in their parent’s jurisdiction. There is no participation exemption: foreign dividends remitted to Brunei are taxable, with treaty or Commonwealth credit, while dividends from Brunei-taxed companies are excluded. Withholding tax on payments to non-residents is 0% on dividends, 2.5% on interest and 10% on royalties, technical and management fees, movable-property rent and non-resident directors’ fees. Losses carry forward for six years, with no carry-back, and returns are due by 30 June on a preceding-year basis.
Social security and health contributions
| Contribution | Employee | Employer | Self-employed |
|---|---|---|---|
| SPK national retirement scheme (citizens and PRs only) | 8.5% of basic salary, no cap | 8.5%–10.5% by salary band; minimum BND 57.50 (~$45) a month | Voluntary participation (confirm terms with TAP) |
| Foreign nationals on employment passes | None | None | None |
| Health or payroll levy | None | None | None |
The National Retirement Scheme (Skim Persaraan Kebangsaan, SPK), run by the Employees Trust Fund (TAP), replaced the old TAP and SCP contributions from July 2023 and removed the contribution cap. Employer rates are a flat BND 57.50 (~$45) for basic salaries up to BND 500 (~$390), 10.5% from there up to BND 1,500 (~$1,170), 9.5% up to BND 2,800 (~$2,190) and 8.5% above that. Foreign employees neither contribute nor accrue benefits, and there is no separate health contribution.
Indirect Taxes
Brunei is one of very few economies with no general consumption tax — no VAT, GST or sales tax — so the indirect burden falls on customs duties, excise and stamp duty.
Value-added tax (VAT)
| Rate | Applies to (examples) |
|---|---|
| None — no VAT, GST or sales tax | All goods and services, including imports and digital services |
| Import duties (generally low) | Mostly ad valorem duty on selected goods under the Customs Import Duties Order, last broadly revised in 2017 |
Excise and other indirect taxes
| Tax | Notes |
|---|---|
| Excise duties | Charged on imports and some local production of tobacco, motor vehicles, petroleum products and sugar-sweetened drinks |
| Alcohol | Sale prohibited; non-Muslim adults may bring in a small, declared personal allowance |
| Stamp duty — share transfers | BND 0.10 (~$0.08) per BND 100 (~$78) of value (0.1%); BND 0.30 (~$0.23) per BND 100 (~$78) if the transferee’s name is left blank |
| Stamp duty — property purchase | About BND 6 (~$4.70) per BND 1,000 (~$783), i.e. ~0.6% (confirm against Schedule 1 of the Stamp Act) |
| Stamp duty — mortgages and leases | Mortgages BND 1 (~$0.78) per BND 500 (~$391) (0.2%); leases BND 1–4 (~$0.78–3.13) per BND 250 (~$196) of rent, rising with the term |
| Stamp duty exemptions | First-home financing up to BND 250,000 (~$195,700); home tenancies with rent up to BND 2,000 (~$1,570); property or share transfers between spouses or from parents to children |
| Transfer tax / environmental tax | None |
Other Taxes Worth Knowing
| Tax | Brunei treatment |
|---|---|
| Capital gains tax | None for individuals or companies; trading gains of a company are business income. EU-driven reform expected to tax some foreign-source gains of companies without substance |
| Dividends (resident individual) | 0% — no personal income tax and no withholding |
| Interest (resident individual) | 0% |
| Rental income | Individuals 0%; companies 18.5% |
| Wealth / net worth tax | None |
| Inheritance / estate tax | None (estate duty abolished — confirm the year, widely reported as 2013) |
| Gift tax | None |
| Immovable property tax (annual) | Nominal land-title tax, e.g. housing land BND 10 (~$8) per quarter-acre outside city areas and BND 50 (~$39) inside; strata homes BND 10 (~$8) per 100 m² |
| Exit tax | None |
For a private investor the burden is close to zero: foreign shares, bonds or funds produce no Brunei tax on dividends, interest or disposals, and there is no wealth charge. The annual land tax is symbolic — a quarter-acre city house plot costs BND 50 (~$39) a year — so what an investor actually pays is stamp duty on transactions. One nuance: estates of Muslims are distributed under Islamic inheritance rules (faraid), so succession planning is a legal question rather than a tax one.
Disadvantages & Risks
Brunei is an absolute monarchy: laws are made by decree, there are no elections, and policy can change quickly — the June 2026 cabinet reshuffle split the former Ministry of Finance and Economy. Succession to the Crown Prince is settled, but the Sultan turned 80 in July 2026. The tax-free model rests on oil and gas, a maturing resource in a small economy with a narrow private sector and a banking sector dominated by a few local institutions. Syariah law shapes daily life, and its full implementation in 2019 drew international criticism. Foreigners’ property rights narrowed with the Land Code (Amendment) Order 2025: leasehold only (up to 60 years for residential and commercial land, 30 for industrial and shophouse land), and nominee or trust holdings had to be declared by 1 August 2026 or became void.
Brunei is not on the FATF grey or black list; its APG mutual evaluation was adopted in 2023, with a follow-up in 2024. It is not on the EU blacklist (Annex I), but has been on the EU grey list (Annex II) since February 2025 because its foreign-source income exemption — foreign income of a company is taxed only when received in Brunei — lacks substance requirements and anti-abuse rules. After an extension, the main reform was due by 30 June 2026, foreign-source capital gains are to be added by early 2027, and the changes are expected to apply retroactively from 1 January 2026. Until final legislation is published, any structure that relies on keeping passive foreign income offshore is under review. The treaty network is thin — 19 agreements, mostly in Asia and the Gulf, none with the US and only Luxembourg in the EU.
Strategy & Ideal Profile
The structure that works best is simple: a Brunei private company (Sdn Bhd) running a real business, managed from Brunei, paying out profits as dividends. A new company pays nothing on its first BND 100,000 (~$78,300) of chargeable income for three years; after that, threshold relief keeps the effective rate at 7.4% on BND 250,000 (~$195,700), and turnover up to BND 1 million (~$783,000) means no CIT at all. Dividends then reach the owner with 0% withholding and 0% personal tax. Exporters can elect the 1% tax on approved exports, larger projects can seek pioneer status from the Ministry of Economy, Trade and Industry, and treaties with Singapore, Malaysia, China, Hong Kong, Japan and the UAE cut foreign withholding on regional flows.
It suits expatriate employees and oil and gas professionals (no tax or pension contributions on salary), company owners serving Brunei and the Borneo market (low effective rates and tax-free dividends), investors and traders already living there (no tax on portfolio income or gains) and families planning succession (no inheritance or gift tax, and stamp duty relief on family transfers). Because individuals pay nothing, there is no day-count to manage; the constraint is immigration. Residence normally comes through an Employment Pass (tied to a job, up to two years, renewable), a Dependant Pass, or the Long-Term Pass introduced in December 2024 (up to five years — confirm criteria with the Immigration Department). Permanent residence is discretionary and generally requires about 15 years of residence.
It does not suit digital nomads or retirees (no remote-work, investor or retirement visa), buyers who want freehold property, or pure holding and IP companies earning passive foreign income, given the pending reform and the lack of a participation exemption. The zero-tax model for individuals has been stable for decades, but it depends on hydrocarbon revenue and on how the foreign-income reform is finally written.
FAQ
Is Brunei a tax haven?
Not in the classic sense. Individuals pay no income, capital gains, inheritance or consumption tax, but companies pay 18.5% on Brunei profits, Brunei exchanges tax information, and it is on neither the EU blacklist nor the FATF lists. The EU does keep it on its grey list (Annex II) until the foreign-source income reform is complete.
What is the corporate tax rate in Brunei in 2026?
18.5% for resident and non-resident companies. The first BND 100,000 (~$78,300) of chargeable income is taxed at 4.625% and the next BND 150,000 (~$117,400) at 9.25%. Companies with turnover up to BND 1 million (~$783,000) are exempt, and upstream oil and gas profits pay 55%.
How does Brunei’s corporate tax threshold relief work?
The standard rate is scaled down on the first slices of profit: 25% of 18.5% on the first BND 100,000 (~$78,300) and 50% of 18.5% on the next BND 150,000 (~$117,400). A company earning BND 250,000 (~$195,700) pays BND 18,500 (~$14,500), an effective 7.4%. New companies pay nothing on the first BND 100,000 (~$78,300) for three years.
Can a foreigner live in Brunei and pay no income tax?
Yes, with a legal basis to live there. Brunei taxes no individual, so there is no 183-day rule to manage for Brunei purposes. The hurdle is immigration: residence normally requires an Employment Pass, a Dependant Pass or the Long-Term Pass, and there is no investor or retirement visa. Your home country may still tax you if you remain resident there.
Does Brunei tax capital gains?
No. Individuals pay nothing on gains from shares, property, funds or crypto, and companies are taxed only on trading gains. The pending reform agreed with the EU is expected to bring certain foreign-source gains of companies without real substance into tax, retroactively from 1 January 2026.
Is there inheritance or wealth tax in Brunei?
No. There is no inheritance, estate, gift or net wealth tax, and property or share transfers between spouses and from parents to children are exempt from stamp duty. Estates of Muslims follow Islamic inheritance law, so succession still needs local legal advice.
How are Brunei dividends taxed for a foreign investor?
Brunei levies 0% withholding tax on dividends, whoever receives them, and residents pay no tax on them. A foreign shareholder may still be taxed at home; Brunei’s 19 tax treaties matter mainly for interest (2.5%) and royalties (10%).
Sources
All figures should be checked against the primary government sources below.
- Ministry of Finance, Revenue Division — income tax: corporate rates, threshold relief, new-company exemption, 1% export tax, 55% petroleum tax and tax credits — mof.gov.bn
- Ministry of Finance, Revenue Division — corporate tax FAQ (no tax on personal income, unincorporated businesses or capital gains) — mofe.gov.bn
- Ministry of Finance, Revenue Division — withholding tax rates — mof.gov.bn
- Ministry of Finance, Revenue Division — stamp duty rates and exemptions — mof.gov.bn
- Ministry of Finance, Revenue Division — Avoidance of Double Taxation Agreements — mofe.gov.bn
- Ministry of Finance, One Common Portal — Income Tax Form Guide (incentive companies, post-pioneer concessionary rate) — ocp.mofe.gov.bn (PDF)
- Ministry of Finance, Royal Customs and Excise Department — customs and excise legislation — mof.gov.bn
- Attorney General’s Chambers — Income Tax Act (Cap. 35) — agc.gov.bn (PDF)
- Tabung Amanah Pekerja (Employees Trust Fund) — SPK national retirement scheme — tap.com.bn
- Land Department — Land Code (Amendment) Order 2025, Strata Titles Act and Stamp Act — land.gov.bn
- Immigration and National Registration Department — entry and residence permits — immigration.gov.bn
- Council of the European Union — EU list of non-cooperative jurisdictions (Brunei in Annex II, February 2026 update) — consilium.europa.eu
- Brunei Darussalam Central Bank — Brunei dollar and currency interchangeability with Singapore — bdcb.gov.bn
- Federal Reserve Board — H.10 foreign exchange rates (SGD and EUR against USD, USD conversions) — federalreserve.gov
USD figures are indicative conversions at ~1 BND = 0.78 USD and rounded. The Brunei dollar is interchangeable at par with the Singapore dollar, converted at SGD 1.2775 per USD (Federal Reserve H.10 rate, 18 September 2026); the euro threshold uses EUR 1 = USD 1.1464 (same release).
Last verified: 26 September 2026.
This is general information, not personal tax or legal advice. Tax outcomes depend on your specific facts; consult a qualified Brunei tax adviser before acting.
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