Bhutan GST introduction and its impact on foreign digital businesses

A major overhaul of Bhutan’s tax rules will require foreign digital businesses to register for Goods and Services Tax (GST) from July 1, 2021.

Mar 29, 2021

A major overhaul of Bhutan’s taxation rules will require foreign digital businesses to register for Goods and Services Tax (GST) in the Himalayan Kingdom from July 1, 2021. 

A move to a new GST regime means Bhutan will replace its existing sales tax and customs and excise duties systems. GST will be applicable on B2C and B2B taxable supplies and taxable imports. The changes, supported by the International Monetary Fund and the World Bank, were announced by Bhutan’s Ministry of Finance back in July 2020

While effective as part of the GST Act from January 2020, the rules specifically relating to GST registration and payment do not come into effect until July 1, 2021. A bilingual version of the Bhutan GST Act 2020 is available here

Affected digital businesses must register to collect and remit Bhutan GST if their sales exceed an annual threshold of 5 million Bhutanese ngultrum, at the time of publication this is circa USD70,000.

While the rules are set to come into force in July 2021 we know digital businesses are currently looking into registering with the authorities in Bhutan. The applicable GST rate on affected supplies is 7%. 

Bhutan GST reference to electronic distribution platforms

For affected supplies and services the entity liable for the collection and remittance of GST to the Bhutan authorities will either be the electronic distribution platform (EDP) or the supplier.

In Bhutan’s GST Act, an EDP “means a service (including a website, internet portal, gateway, store or market place) that satisfies the following conditions [among others]:

  • the service allows persons to make supplies available to end-users; 
  • the service is delivered by means of electronic communication.”

Bhutan’s reference to an EDP mirrors other global implementations. In Australian GST legislation, for example, there is specific reference to EDPs. As is the case with other legislative implementations across the globe a platform is often deemed to be the provider of the digital service to the end customer.


The information contained in this publication (“Information”) has been provided to you for general information purposes only and we recommend that you obtain professional advice before acting or refraining from action as a result of the Information. Taxamo accepts no liability for any loss occasioned to any person acting or refraining from action as a result of the Information.