Singapore and Bhutan signed an income tax treaty on 12 May 2026 to clarify taxing rights, prevent double taxation and support cross-border investment and trade. The treaty applies to Singapore income tax and Bhutan income tax (including GMC income tax), with withholding tax rates of 0%/5% on dividends, 5% on interest and 5% on royalties.
The Inland Revenue Authority of Singapore (IRAS) announced that it signed an income tax treaty with Bhutan on 12 May 2026.
The agreement was signed in Singapore by Jeffrey Siow, Acting Minister for Transport and Senior Minister of State for Finance, Republic of Singapore and HE Lyonpo Lekey Dorji, Minister of Finance, Royal Government of Bhutan.
For the territory of Bhutan, excluding Gelephu Mindfulness City (GMC), the treaty applies to Bhutan income tax, including any surcharge thereon. For the territory of GMC, it applies to GMC income tax, including any surcharge. The treaty also applies to Singapore income tax.
The agreement clarifies the taxing rights of both countries on income arising from cross-border business activities, and addresses the double taxation of such income. This will lower barriers to cross-border investment and trade and economic flows between both countries.
Withholding tax rates for dividends are subject to a 0% rate where the beneficial owner is a company; otherwise, a 5% rate applies, with a separate general exemption provided for dividends paid to or from GMC. Interest is subject to a 5% rate, with a separate general exemption provided for interest paid to or from GMC. Royalties are subject to a 5% rate.
The treaty will enter into force upon the exchange of instruments of ratification. It will apply to withholding taxes from 1 January of the year following its entry into force and to other taxes from 1 January of the second year following its entry into force.
