NA endorses DTA Agreement between Bhutan and Bangladesh

The National Assembly, today, passed the Double Taxation Avoidance Agreement (DTAA) between the governments of Bhutan and Bangladesh. The agreement will now be forwarded to the National Council for deliberation.

The agreement negotiated by the Government of Bhutan was signed in April, this year.

The DTAA will reduce and resolve incidences of double taxation on cross border taxes between Bhutan and Bangladesh. Until today, outbound and inbound transactions between the two countries were taxed by both of them on the same incomes leading to double taxation.

Bhutanese airlines will benefit by not having to pay tax on cargo and passengers boarding from Dhaka, Bangladesh. The agreement also exempts taxes levied on non-diplomatic Bhutanese living in Bangladesh. It will also curve cross border tax evasion, and encourage potential investors from Bangladesh in Bhutan. Bhutanese studying in Bangladesh will also be exempted of taxes on their stipend and living allowances.

Despite greater benefit for Bhutan, the agreement will require Bhutan to discontinue tax collections from Bangladeshi nationals. It would also lose tax revenue from Bangladeshi professors and researchers in the first year of their stay in Bhutan.

Stakeholders like the Ministry of Economic Affairs, Bhutan Chamber of Commerce and Industry, Druk Holding and Investments, and Druk Air were consulted to frame the agreement.

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