Basic taxes (briefly)
|Corporate tax (in detail)||Businesses doing business on the Marshall are subject to income tax. The revenue includes all income, the enterprise can be either a legal entity or not. In 2021, tax is levied at $ 80 on the first $ 10,000 of revenue and 3% on the excess.|
|Capital gains tax. Details|
|VAT. Details||Local authorities levy sales tax at rates of 2-4%.|
International tax agreement
|Tax treaties entered|
|Tax Exchange Information Agreement (TEIA)||Australia, Denmark, Ireland, Faroe Islands, Finland, Greenland, Iceland, Korea, Netherlands, New Zealand, Norway, Sweden, USA|
Non-resident (i.e., offshore) domestic corporations are statutorily exempted from taxation on income and assets.
The Marshall Islands do not impose personal income tax.
Corporate Income Tax
There is no corporation tax in Marshall Islands.
Capital Gains Tax
Capital gains tax is not imposed in Marshall Islands.
Withholding tax is not imposed in Marshall Islands.
Offshore companies which do not operate in Marshall Islands are not subject to VAT.
There is no stamp duty in Marshall Islands.
The annual maintenance fee for an International Business Corporation (IBC) is US$450.00 and is due on the anniversary of the IBC’s incorporation.
Other Taxes and Duties
Please note that taxes below only apply to residents of the Marshall Islands (and thus would not apply to non-resident companies).
|Business Gross Revenue Tax (BGRT)||The BGRT is assessed against the gross revenues of all businesses operating within the Republic. The tax is assessed at the rate of $80 for the first $10,000 of annual gross revenue and 3% on amounts over $10,000. Gross revenue is very broadly defined within the code to include virtually all receipts except (1) refunds, rebates and returns; (2) monies held in a fiduciary capacity; and (3) income in form of wages and salaries which are taxed under other provisions of the law. Should a business derive its gross revenue from activities both within and outside the Republic, the gross revenue in its entirety will be presumed to have been derived from sources within the Republic unless the business seeks an apportionment of the tax through the filing of a prescribed form with the Secretary of Finance.|
|Tax on Income from Immovable Property||A tax of 3% is assessed on all gross income from immovable property leased, exclusive of buildings and other improvements on land. This tax is collected from the lessee of such property who, in turn, is permitted to withhold the tax from rental payments made to the lessor.|
|Wage and Salary Tax||A tax of 8% applies to the first $10,400 of wages and salaries earned by other than U.S contractor personnel, with the rate increasing to 12% on amounts in excess of $10,400. Every employee earning less than $5,200 is allowed an exemption of $1,560 per year from wages and salaries subject to this tax.|
|Non-Resident Income Tax||A 10% tax is assessed on the gross income earned by non-residents for services provided to any client in the Marshall Islands.|
|Social Security Tax||With respect to employees, businesses are also required to make quarterly social security contributions on “covered earnings.” Covered earnings are defined as the compensation paid to employees up to $5,000 per quarter. From the employee’s wages, the employer is to withhold and pay to the Social Security Administration 7% of covered earnings. From the employer’s revenues, the employer is to contribute to the Social Security Administration for the benefit of the employee another 7% of covered earnings.|
|Health Insurance||Businesses are required to make quarterly health insurance contributions on covered earnings. Covered earnings for health insurance is defined the same as for social security contributions. From the employee’s wages, the employer is to withhold and pay to the Social Security Administration 3.5% of covered earnings. From the employer’s revenues, the employer is to pay to the Social Security Administration for the benefit of the employee another 3.5% of covered earnings.|
Double Tax Agreements
Marshall Islands has exchange of information relationships with 14 jurisdictions through 0 DTCs and 14 TIEAs.
- 15 TIEAs: Australia, Denmark, Faroe Islands, Finland, Greenland, Iceland, India, Ireland, South Korea, Netherlands, New Zealand, Norway, Sweden, United Kingdom, United States.
Foreign exchange control
There are no foreign exchange controls in Marshall Islands.
IBCs are required to prepare annual accounts. However, there are no filing requirements.
IBCs are not required to prepare and file annual return.
IBCs are not required to prepare and file annual tax returns.
Taxes of Marshall Islands
|Min. rate for corporate tax||No|
|Capital gains tax||No|