3. Unit 1-3 (1)

Page 1: Bhutanese Tax Structure

Page 2: Business Income Tax (BIT) & Corporate Income Tax (CIT)

Business Income Tax (BIT)

  • BIT is a non-corporate business tax.

  • Levied at a rate of 30% on net profit.

  • Payable by unincorporated business entities holding a trade license or registration certificate issued by the Ministry of Economic Affairs (MoEA).

Corporate Income Tax (CIT)

  • CIT is a corporate tax.

  • Also levied at a rate of 30% on net profit.

  • Payable by entities registered under the Company’s Act of the Kingdom of Bhutan, 2000.

Page 3: Tax Registration and Filing

BIT/CIT Registration

  • Every business or company must register with the Regional Revenue & Customs Office (RRCO) within 3 months of obtaining a trade license or permit.

Tax Filing

  • Tax returns must be filed on a self-assessed basis to the RRCO by 31st March following the end of the income year.

  • Different forms:

    • FORM BIT-2 for BIT payers

    • FORM CIT-2 for CIT payers

Page 4: Taxpayer Number (TPN)

Definition of TPN

  • TPN is a system-generated alphanumeric number assigned to taxpayers by the RRCO at registration.

  • It identifies all tax transactions relating to a specific tax entity.

Importance of TPN

  • Must be quoted in all correspondence with the department to identify the taxpayer accurately.

Page 5: Organizational Chart

Page 6: Overview of Organizational Charts

Definition

  • An organizational chart (or organogram) is a diagram showing the structure of an organization, including the relationships and relative ranks of its parts and positions/jobs.

Page 7: Key Positions in the Organizational Chart

  • Board of Directors

  • Chief Executive Officer (CEO)

  • Vice Presidents

  • Chief Financial Officer (CFO)

  • Controller

  • Treasurer

  • Internal Auditor

  • Managerial Accountant

  • Tax Accountant

  • General Accountant

Page 8: Board of Directors and CEO

Board of Directors

  • An elected group representing shareholders that set policies for corporate management and meets regularly.

Chief Executive Officer (CEO)

  • The top position responsible for executing existing plans and policies, managing the organization, and setting future strategies.

Vice Presidents

  • Second or third in command, may manage specific departments to achieve goals and results.

Page 9: Chief Financial Officer (CFO) and Controller

Chief Financial Officer (CFO)

  • Manages the company’s financial operations and strategy, reports directly to the CEO.

  • Involved in investments, capital structure, and long-term business strategy.

Financial Controller

  • Reports to the CFO (or may be the top financial officer if no CFO exists).

  • Acts as the head of accounting, oversees financial statement preparation, and ensures report authenticity.

Page 10: Treasurer and Internal Auditor

Treasurer

  • Manages cash, liquidity, risk management, and corporate finance.

Internal Auditor (IA)

  • A trained professional providing objective evaluations of financial and operational activities.

  • Ensures compliance with laws and regulations, proper procedures, and operational efficiency.

Page 11: Accountant Roles

Financial Accountant

  • Maintains financial records, supervises tax payments, and manages accounts.

  • Utilizes technology for financial record maintenance and classification.

Managerial Accountant

  • Records and analyzes financial data to inform management decisions aimed at organizational growth.

Tax Accountant

  • Assists companies/clients in preparing tax statements and payments.

  • Identifies tax savings and analyzes relevant corporate tax issues.