GST is levied on the basis of consumption in Bhutan; hence, the supply of services made by the non-resident is subject to GST in Bhutan if it is consumed in Bhutan. The supply of services by a non-resident is subject to GST, if the non-resident carries on an economic activity at or through a fixed place in Bhutan and the supply is made in the course of that economic activity, or at or through that fixed place.
The supply of services by a non-resident is considered as a supply made in Bhutan, if:
- the services are physically performed by a person who is in Bhutan;
- the services are directly related to land located in Bhutan; or
- the services are imported B2B services or imported B2C services.
A non-resident is required to appoint a GST representative in Bhutan to comply with the GST obligations.
Electronic services rendered by a non-resident to resident taxpayers (B2B) are taxable on a reverse charge basis and the receiver of services is liable to pay GST. In case of supply of services to a non-taxable person (B2C) electronically, the liability to invoice and remit GST lies with the operator of the electronic distribution platform if the supply is made through a single electronic distribution platform, or the supplier if the supply is not made through an electronic distribution platform.
Electronic distribution platforms include services provided by a website, internet portal, gateway, store or market place, satisfying the following conditions:
- the service allows persons to make supplies available to end-users;
- the service is delivered by means of electronic communication; and
- any of the supplies that are imported B2B services are to be made by means of electronic
Electronic services mean any of the following, when provided or delivered on or through a telecommunications network:
- websites, web-hosting, or remote maintenance of programmes and equipment;
- software and the updating thereof;
- virtual currencies;
- images, text, and information;
- access to databases;
- self-education packages;
- music, films, and games;
- political, cultural, artistic, sporting, scientific, and other broadcasts and events including broadcast television services delivered by means of electronic communication; and
- any other supplies that are imported B2C services that are to be made by means of electronic communication.