Vanuatu Taxation

Vanuatu is one of the few tax free countries in the world. There is no corporate tax, no capital gains tax, no estate tax, no wealth tax, no withholding tax, no gift tax

Vanuatu has introduced New Tax Laws, effective from 1 January 2020. The most important changes include

1. Tax Identification Numbers – Businesses are required to have and use a Tax Identification Number (TIN)
2. Records – Record keeping obligations for business taxpayers are made clear
3. Forms – There will be some new forms and some forms will be revised
4. Modernizing – Electronic filing and paying is facilitated in the new laws
5. Penalties and Offences – The Act introduces or revises penalties and offences, including a late filing penalty.
6. DCIR Powers – DCIR’s powers to recover debt and collect information are widened
7. Transparency – Increased transparency in the way tax is administered
8. Tax Agents – Tax Agents will need to be registered (from 1 April 2020)
9. International Tax commitments – There will be increased cooperation with other countries tax administration

Personal income tax is a tax on the income earned by individuals. Income includes salaries and wages, business income (i.e. business profits), investment income, rental income, interest etc. Personal income tax will be imposed at a ‘progressive’ rate (meaning that tax paid as a proportion of income rises with income). Only individuals earning income above a tax-free threshold will pay income tax. People earning less than 750,000 vatu (US$6,000) a year (or 28,846 vatu a fortnight with 26 pay periods a year) will not pay income tax.