Vanuatu Taxes: A Detailed Guide

Vanuatu, a Pacific island nation, is among the countries that create favorable conditions for foreign investors and business.

Companies operating outside Vanuatu are exempt from tax obligations. Even shareholders bear no costs under Vanuatu's tax system. This also applies to offshore companies. Details on the terms for obtaining Vanuatu citizenship by investment are available separately.

Main Taxes

Vanuatu's favorable tax system creates a comfortable environment for foreign investors, offering benefits and advantages that are hard to find anywhere else. The state does not levy taxes on income, inheritance, capital gains, or capital export for individuals. Legal entities also receive certain tax benefits.

Personal Income Tax

There is no personal income tax in Vanuatu. The country's law makes no distinction between foreign and local employees, regardless of whether their employers are residents or non-residents.

Corporate Income Tax

The corporate income tax rate in the country is zero. All income earned by organizations is not taxed by the Vanuatu government. It does not matter whether the organizations operate within the country or abroad.

Capital Gains Tax

Vanuatu has no capital gains tax. Profits from the sale of assets are not subject to taxation.

VAT

Vanuatu's value-added tax (VAT) rate is 12.5%. It applies to all goods and services, including commercial real estate.

State Duty

There is a state registration fee for an international company, ranging from $300 to $1,000.

Other Vanuatu Taxes

The country requires pension fund contributions, which amount to 6% of employee income.

When registering a new business in Vanuatu, a registration fee of 2% of the authorized capital must be paid.

Vanuatu's tax system makes the country very attractive to foreign investors and entrepreneurs looking to grow their business in a country with a moderate tax burden.

Property Taxes

It's worth noting that the standard Vanuatu VAT rate is 12.5% on most goods and services, but for the purchase of residential real estate, it is paid by the developer.

On the other hand, when purchasing commercial properties, VAT is paid by the new owner during the purchase transaction.

A 5% fee is also charged when transferring ownership to a new owner.

Rental Income Tax

If you own property and rent it out, you will need to pay income tax at a rate of 12.5%. It is charged twice a year, if rental income exceeds 200,000 VUV (about $1,700).

Stamp Duty

Vanuatu's stamp duty rate is 5%. The following transactions may be exempt from stamp duty:

• Transfer of any type of property other than real estate located in Vanuatu.
• All transactions and filings related to a company's shares, bonds, or other securities.
• All transactions directly related to business, including various commercial activities carried out as part of core operations.

Investors should factor in legal service costs (about 0.5-1% of the property price) and insurance (about 0.5-0.7% of the asset's value), which is not a formality in this country given the frequency of earthquakes, cyclones, and volcanic eruptions.

Tax Reporting

Although companies are not required to file reports with government inspection bodies, they still need to keep accounting records and track the movement of capital and currency exchange. This helps maintain transparency in operations.

Data Confidentiality

Vanuatu upholds a principle of confidentiality. The country protects companies' personal and financial data, providing additional assurances for business owners. This status also extends to banking operations: local banks safeguard their clients' personal information.

Compliance With International Standards

Vanuatu applies FATF (Financial Action Task Force) standards, strengthening protection against illegal activity and reinforcing its reputation in the global market.

One nuance worth noting: Vanuatu has signed a small number of double taxation avoidance agreements. Most countries in the world do not have corresponding agreements with the country.

Nevertheless, Vanuatu offers an attractive tax system for business and investment worldwide.

By reaching out to MIRBEZVIZ specialists, you get detailed guidance on all matters related to this country's citizenship.

We value your time, which is why we take on as much of the document-processing work as possible ourselves. Call us and we'll go over all the details with you, as well as explain all the nuances of preparing documents.