Withholding tax (TDS) calculator Bhutan

Whoever pays certain amounts in Bhutan must hold back part of the payment and hand it to the Department of Revenue and Customs: 2% on a contract or service fee to a resident, 5% to a non-resident, 5% on rent, and 10% on interest. These rates apply since January 1, 2026.

Choose the payment and the amount to see what to withhold and what the other party receives.

How it's calculated

Multiply the payment by the rate for its type.
Royalties and other investment income: 5%. Dividends to individuals: 10%. A partner's share: 5%. Lottery, betting and gambling winnings: 20%.
Deposit the amount within 10 days after the end of the calendar month of the deduction, as the notification of 16 December 2025 requires.

An example

A company pays a resident plumber a fee of Nu. 100,000. It withholds 2 %, Nu. 2,000, and pays Nu. 98,000. By the 10th of the next month it deposits the Nu. 2,000. For a non-resident contractor the rate is 5 %, so Nu. 5,000 stays back.

Frequently asked questions

Who has to deduct TDS in Bhutan?

Government and semi-government entities, companies, non-governmental organisations, businesses, agencies and individuals, according to Chapter 11 of the Income Tax Act of Bhutan 2025 and part 2 of the notification of the Department of Revenue and Customs.

What about tax on salaries?

An employer uses the monthly table in Annexure I of the Rules on the Income Tax Act, not a flat rate. See the take-home pay calculator.

Must a household withhold from a builder?

The notification lists an individual who pays for construction, renovation, repair or maintenance of a home they own or occupy: 2% for residents and 5% for non-residents.

Is all interest or dividend income taxed?

No. Schedule 3 exempts fixed deposit interest up to Nu. 400,000 and dividends up to Nu. 300,000 a year for an individual who is not a business, and winnings up to Nu. 5,000 per win. This calculator applies the rate to the amount you enter.

Key terms

TDS: Tax deducted at source, also called withholding tax.
Withholding person: The one who makes the payment and must deduct and deposit the tax.
Non-resident: A person who does not meet the residence test of the Act.