Verified Facts
The tax rates in Marshall Islands range from 0% to 30% for individual income, with a corporate tax rate of 11% for certain businesses, and the country has a relatively simple tax system with no value-added tax or sales tax.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
The Marshall Islands has a territorial taxation system, which means that only income earned within the country is subject to tax, and foreign-earned income is not taxed. The country's tax system is relatively simple, with a focus on taxing business and individual income. Residency rules for tax purposes are based on physical presence, with individuals considered residents if they are present in the country for at least 183 days in a calendar year.
The Marshall Islands government has implemented various measures to attract foreign investment and promote economic growth, including a relatively low corporate tax rate and a lack of value-added tax (VAT) or goods and services tax (GST). The country's tax system is also characterized by a lack of tax treaties with other countries, which can make it difficult for individuals and businesses to navigate international tax obligations. However, the country has agreements with certain countries for international cooperation and tax information exchange, which can help to prevent tax evasion and promote transparency.
Personal Income Tax
| Income Bracket (USD) | Tax Rate |
|---|---|
| 0 - 10,000 | 0% |
| 10,001 - 20,000 | 10% |
| 20,001 - 30,000 | 20% |
| 30,001 - 50,000 | 25% |
| 50,001 and above | 30% |
Personal income tax in the Marshall Islands is relatively straightforward, with a few deductions and allowances available, including a standard deduction of $2,000 and deductions for charitable contributions and mortgage interest. Taxpayers are required to file a tax return by April 15th of each year, and can claim a credit for taxes paid to other countries. The tax authority also offers a tax amnesty program for individuals who have failed to file tax returns or pay taxes in the past.
Corporate & Business Tax
- The corporate tax rate in the Marshall Islands is 11% for certain businesses, including those engaged in fishing, tourism, and manufacturing.
- Small businesses may be eligible for incentives, including reduced tax rates and investment subsidies.
- The country has a free trade zone in the port of Majuro, which offers a range of tax and regulatory incentives for businesses.
- Businesses are required to register with the tax authority and obtain a tax identification number before commencing operations.
- The government also offers investment incentives, including tax breaks and subsidies, for businesses that invest in certain sectors, such as renewable energy and infrastructure development.
VAT / Sales Tax
- The Marshall Islands does not have a value-added tax (VAT) or sales tax, which can make it an attractive location for businesses and individuals.
- However, the country does have a range of excise taxes on certain goods, including tobacco, alcohol, and petroleum products.
- The government also imposes a gross revenue tax on certain businesses, including hotels and restaurants.
- There are no tourist refund schemes in place, but the government is considering introducing a scheme to refund taxes to tourists on certain purchases.
For Expats & Foreign Workers
- Tax residency rules are based on physical presence, with individuals considered residents if they are present in the country for at least 183 days in a calendar year.
- The Marshall Islands has a limited double taxation treaty network, but has agreements with certain countries for international cooperation and tax information exchange.
- Foreign workers are required to obtain a work permit before commencing employment, and may be eligible for a range of tax incentives and subsidies.
- The country has a social security system in place, which provides benefits to citizens and residents, including old-age pensions and healthcare benefits.
- Remittance rules are relatively straightforward, with individuals and businesses able to remit funds abroad without restriction.
- Foreign workers may also be eligible for a tax credit for taxes paid to other countries, which can help to reduce their tax liability in the Marshall Islands.
Crypto & Investment Income
- Investment income, including dividends, interest, and capital gains, is subject to tax in the Marshall Islands.
- Cryptocurrency is not specifically regulated in the Marshall Islands, but may be subject to tax as a form of investment income.
- The country has a securities exchange in place, which provides a platform for buying and selling securities, including stocks and bonds.
- Investment income earned by non-residents may be subject to withholding tax, which can range from 10% to 20% depending on the type of income.