The value in GMC's tax regime lies less in the headline rate than in two negotiated incentives whose approval windows are closing, so timing and evidence decide what a business actually pays. The Income Tax Act 2025 gives the Gelephu Mindfulness City Special Administrative Region (GMC) a 15% corporate rate, a 0% rate for non-citizen individuals until 31 December 2030, and two negotiated incentives whose approval windows close on the same date. Basnet Law advises on the regime and prepares applications to the designated officer for founders company and strategic and development company status. This page explains how the regime fits together and how we secure an incentive.
How we help
- Model the effective rate for companies, trustees and non-resident persons, and the individual position.
- Prepare and file founders company applications and strategic and development company applications.
- Structure groups to use group relief between GMC companies.
- Build transfer pricing files that satisfy the arm's length rules and avoid the 5% surcharge.
- Advise on share disposal exemptions, amalgamations and the general anti-avoidance rule.
- Advise on advance rulings, and support returns and correspondence with the Comptroller.
How GMC tax law works, in plain terms
The Income Tax Act 2025 charges "every company or body of persons, tax at the rate of 15% on every dollar of the chargeable income". Non-resident persons other than individuals, trustees and executors pay the same rate. Individuals who are not citizens of Bhutan pay 0% on chargeable income derived on or before 31 December 2030. All amounts are in US dollars.
Two incentives require approval. The designated officer may approve an industry not carried on in GMC on an adequate scale and with favourable prospects as a founders industry, and may approve a company in that industry as a founders company, exempting its qualifying business income for a period of up to 15 years including extensions. The designated officer may also approve a strategic and development company and set a concessionary rate "of not less than 5%" for a relief period of up to 20 years. No approval under either incentive may be granted after 31 December 2030.
Group relief lets a transferor company transfer qualifying deductions to a claimant GMC company in the same 75% group with the same accounting date, on election. Related-party dealings must be at arm's length; the Comptroller may adjust income, deductions or losses, a 5% surcharge follows any adjustment, and companies, firms and trusts with gross revenue above $10 million must prepare transfer pricing documentation by the return filing date.
The Act also provides advance rulings, the fund exemptions, the family office exemption and the finance and treasury centre rate.
Who this is for
- Companies relocating or expanding into GMC and modelling their effective rate.
- Founders in new industries who may qualify for the founders company exemption.
- Capital-intensive or strategic investors negotiating a concessionary rate.
- Multinational groups with related-party flows into or out of GMC.
How an engagement runs
- Tax profile: entities, income sources, related parties and residence, so we know the starting position.
- Incentive eligibility memo for the founders and strategic and development routes, with the evidence the designated officer will need.
- Application drafting in the prescribed form, submission and follow-up to the letter of approval.
- Compliance build: transfer pricing documentation, group relief elections and the return calendar.
- Monitoring of Gazette notifications and regulations affecting the position.
Frequently asked questions
What is the corporate tax rate in GMC?
15% on every dollar of chargeable income for companies and bodies of persons under the Income Tax Act 2025. There is no lower band.
Can the rate be reduced?
Yes, by approval. A strategic and development company can be granted a rate of not less than 5%; a founders company can be fully exempt on its qualifying business. Both require an application to the designated officer and approval before 31 December 2030, and we prepare and file it.
Is there a capital gains tax?
The Act taxes income. Gains on ordinary or preference shares held at 20% or more for at least 24 months are exempt for the divesting company. Other disposals need case-by-case analysis, which we provide.
When does transfer pricing documentation apply?
From the first year of assessment, for any company, firm or trust with gross revenue over $10 million, or where documentation was required the previous year. We build the file to the filing date.
Can I get a binding advance ruling?
The Income Tax Act 2025 and its Seventh Schedule provide for advance rulings from the Comptroller, and we prepare the application.
Talk to GMC counsel on the ground
Basnet Law Pte. Ltd. is the first law firm incorporated in the Gelephu Mindfulness City. A short conversation early in a matter usually saves time and cost later. Write to basnet@basnetgmc.com or office@basnetgmc.com with a few lines about your plans, and we will tell you plainly what is needed, how long it takes, and whether we are the right fit.
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
