World Tax News: Bhutan imposes Taxes on vacant land and more

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1. Bhutan enacts Property Tax Act, imposes taxes on vacant land

The Bhutanese Ministry of Finance has notified the 2022 Property Tax Act, which received approval in December 2022. The said Act became effective from 1st January 2023. The law overrides any previous laws, regulations, notifications, circulars, and executive instruments that conflict with its provisions.

The law includes provisions for:

(a) An annual land tax to be paid on all land, calculated at 0.1% of the taxable land value;

(b) An annual building tax to be paid on all buildings, calculated at 0.1% of the taxable building value;

(c) An annual vacant land tax is to be paid at 15% of the land tax.

The vacant land tax shall apply to land which meets all the following criteria:

(i) The land falls within the areas specified in Schedule 2 of this Act;

(ii) Urban services have been made available as prescribed in the Rules made under this Act;

(iii) The owner of the land is not restricted by law, including court order, or any prevailing rules or regulations from constructing a building on the land; and

(iv) No development has been carried out on the land within two years from the date on which all of the urban services were made available.

The law also includes exemptions and reductions for land and building tax payments. All taxes under the law are due on 31st December of each year, but the responsible authority may allow for payment in installments, with or without interest. Failure to pay taxes on time will result in a penalty of 24% per year on unpaid taxes.

Source: Property Tax Law

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