Welcome to Vanuatu, a nation in the South Pacific Ocean known for its Y-shape, beautiful landscapes, friendly people, and relaxed lifestyle. Travelers, investors, and expats are attracted to the nation not only for its natural beauty and rich history but also for the excellent benefits allowed by the nation’s tax system. In this guide, we’ll walk you through Vanuatu taxes, including how you can become a tax resident of Vanuatu, the benefits, and more!
Vanuatu is an archipelago consisting of 83 small islands of volcanic and coral origin. Its official languages are Bislama, English, and French, and the landscape consists of a number of tropical rainforests. Known for its rich sea life and delicious traditional cuisine, visitors will enjoy a number of unforgettable experiences here.
You can view the Vanuatu Jungle from a zipline, enjoy a rainforest walk along the Bridges of Eden, catch a glimpse of turtles on an island tour of Port Vila or visit to the turtle sanctuary at Naiwe Beach, visit the fully functional Underwater Post Office, and visit Yasur Volcano, the ‘Lighthouse of the Pacific’ that is considered one of the most active volcanoes in the world.
Another attractive aspect of Vanuatu is that it offers a unique environment for individuals and businesses seeking favorable tax conditions. With these attractive tax policies and its commitment to promoting economic growth, Vanuatu has become a sought-after destination for international investors and entrepreneurs. Whether you’re interested in personal taxation, corporate taxes, or the various incentives available, this comprehensive introduction will provide you with valuable insights into taxes in Vanuatu. Keep reading as we embark on this journey and discover the tax advantages that Vanuatu has to offer.
If you’re planning on moving to Vanuatu, check out our article: Relocating to Vanuatu.
Vanuatu Tax Benefits and Rates
In Vanuatu, there are two main types of tax – corporate tax and individual tax. Corporate income tax is paid by a business or corporation on the income made by the entity. Individual tax is paid by a person.
Due to the excellent tax benefits in Vanuatu, it’s no surprise that many wonder if Vanuatu is a tax-free country. You’ll be happy to hear that there are no taxes on income, inheritance, capital gains, or property in Vanuatu. In addition to this, companies pay value-added tax (VAT) at the rate of 12.5 percent.
Benefits of taxes in Vanuatu
The greatest benefit of taxes in Vanuatu is that they are limited, meaning you won’t have to pay too much on a yearly basis. Furthermore, Vanuatu makes the process of submitting your tax returns very straightforward. The economic landscape in Vanuatu provides ample opportunity for companies from across the globe to invest in the country and boost its economy.
In fact, Vanuatu is considered a tax haven for this very reason, as the minimal taxes encourage international companies to situate their operational headquarters in the country. The benefit is mutual because, while these international companies benefit from lower taxes, the country benefits from economic investment that enables it to create a welcoming environment for more companies.
What you may not know is that capital export tax, capital gains tax, inheritance tax, personal income tax, tax on real estate ownership, and wealth tax are not charged in Vanuatu. This means that individuals do not pay most of the taxes in Vanuatu.
VAT (value-added tax) is already included in the cost of goods and services, meaning individuals are not required to pay this tax separately. The VAT rate in Vanuatu is 12.5 percent, a much lower tax rate compared to the 20 percent found in Austria and the UK.
Companies in Vanuatu can also enjoy several tax benefits. The country is eager to encourage foreign investment in the country, and it does this by providing favorable tax conditions for businesses. For example, companies registered in Vanuatu do not have to pay taxes for 20 years, instead paying an annual fee of $300.
Vanuatu taxes for companies
The table below outlines the tax rate by category for companies in Vanuatu:
|Annual registration fee||$300 – $1,000|
|Contributions to a pension fund||Six percent|
|Corporate tax||Zero percent|
Property Taxes in Vanuatu
Owning property in Vanuatu is tax-free. However, when it comes to buying, selling, or renting out a property, you are required to pay a tax of between two and 12 percent.
Vanuatu taxes on real estate
The table below lays out these different taxes and the rates at which they are charged:
|Tax category||Tax rate|
|Registration fee||Two percent|
|Stamp duty||Five percent|
|Tax on rental income||12.5 percent|
|VAT on the purchase of commercial real estate||12.5 percent|
The national currency used in Vanuatu is the Vatu (VT). Rental income tax is charged every six months on amounts greater than VT200,000 ($1,800). Rental income tax is charged in two stages:
- Tax for the period from 1 December to 31 May must be paid on 28 June.
- Tax for the period from 1 June to 30 November must be paid on 28 December.
Rental tax for individuals
Individuals who own properties in Vanuatu and rent them out are required to pay rental tax. If the rental income for six months is lower than VT200,000 ($1,800), then rental income tax is not charged. If the rental income for six months exceeds VT200,000, a 12.5 percent income tax is charged.
Rental tax for companies
Rental income tax rules for companies are not the same as for individuals. If a company owns a property in Vanuatu and rents it out, a tax of 12.5 percent is charged on any rental income.
Tax Reporting in Vanuatu
If you own an international company in Vanuatu, you are required to keep accounting records and oversee the flow of capital and currency exchange. However, you are not required to submit reports regarding this data to the Vanuatu Customs and Inland Revenue Department (CIR), a government agency that protects the community from any potential risks that may arise from international trade.
Privacy in Vanuatu is respected, and the protection of data from businesses is guaranteed.
Vanuatu does not allow access to a company’s financial records or the personal data of its owners. Furthermore, banks in Vanuatu guarantee their customers’ confidentiality, so opening a bank account in the country will not carry any risks for you.
In addition to this, Vanuatu meets the requirements of the Financial Action Task Force (FATF), a global organization that works to combat money laundering and prevent illegal activities. Vanuatu has concluded Tax Information Exchange Agreements (TIEAs) with several countries, providing them with information if they make a request connected with a criminal or civil tax investigation. The following countries concluded TIEAs with Vanuatu:
- Faroe Islands
- New Zealand
- Republic of Korea
- San Marino
At this stage, you may be wondering about double taxation in Vanuatu. The country does not have Double Taxation Conventions (DTCs) with most countries in the world. However, the majority of income sources and transactions in the country are tax-free. This means that if you, as a company or individual, transfer money from Vanuatu to another country or earn income abroad, you are not required to pay taxes twice.
Vanuatu Citizenship by Investment Program
Thanks to the attractive benefits that can be found in Vanuatu, you may want to consider obtaining a Vanuatu passport. Vanuatu’s citizenship by investment program is the fastest route to citizenship – it only takes two months!
The benefits of obtaining a Vanuatu passport through the country’s citizenship by investment program include visa-free travel to 96 countries, including Hong Kong, Singapore, and the UK, great tax benefits, no residency requirements, and no tests or interviews. Additionally, close relatives of the applicant can obtain citizenship with them.
In order to qualify, the applicant must make a contribution to Vanuatu’s National Development Fund, the money which is used to develop the country’s economy.
You can learn more in our article: Vanuatu Citizenship by Investment – The Ultimate Guide by Experts.
Global Citizen Solutions: Who We Are and How We Can Help You
Global Citizen Solutions is a boutique investment migration consultancy firm focused on finding the right residency or citizenship by investment program for individuals wishing to secure their future and become global citizens.
With offices in Portugal, the United Kingdom, Hong Kong, and Brazil, our multilingual team guides individuals and families from start to finish, providing expert advice considering freedom, mobility, taxation, and security.
Why work with Global Citizen Solutions?
- Global approach by local experts. We are corporate members of the Investment Migration Council, with local expertise in Vanuatu.
- 100 percent approval rate. We have never had a case rejected and will offer you an initial, free-of-charge, due diligence assessment before signing any contract.
- Independent service and full transparency. We will present to you all the investment options available, and all expenses will be discussed in advance, with no hidden fees.
- An all-encompassing solution. A multidisciplinary team of immigration lawyers, investment specialists, and tax experts will take into consideration all your and your family’s mobility, tax, and lifestyle needs.
- Confidential service and secure data management. All private data is stored within a GDPR-compliant database on a secure SSL-encrypted server.
With its stunning natural beauty, strategic location, and business-friendly tax regime, Vanuatu stands as a unique destination that combines favorable tax conditions with an idyllic lifestyle. By understanding and leveraging the opportunities presented by Vanuatu’s tax system, individuals and businesses can thrive in this tropical paradise while contributing to the nation’s economic growth.
Whether you’re a seasoned investor or an aspiring entrepreneur, exploring the tax advantages of Vanuatu can open doors to new possibilities. So seize the opportunity, navigate the tax landscape, and unlock the full potential taxes in Vanuatu have to offer.
If you’d like to learn more about Vanuatu, the following articles may interest you:
Frequently Asked Questions about Taxes in Vanuatu
What is the tax scheme in Vanuatu?
The tax system in Vanuatu is set up so that individuals do not need to pay a lot of tax. Personal income tax, wealth tax, inheritance tax, tax on real estate ownership, capital gains tax, and capital export tax are not charged. Additionally, value-added tax (VAT) is a 12.5 percent tax rate already included in the cost of goods and services, meaning you do not have to pay it as a separate tax.
Is Vanuatu still a tax haven?
Vanuatu is considered a tax haven by many individuals and international companies. The reason for this is that taxes like VAT (value-added tax) and tax on rental income are limited, and there is no capital gains tax, capital export tax, inheritance tax, personal income tax, or taxation on real estate ownership.