Oceania & Pacific
Palau tax rates 2026
A low, territorial-style system taxes local wages up to 12%, business profits at 12%, and adds a 10% Palau Goods & Services Tax. There is no capital gains tax.
Territorial
Last verified
The taxes
| Personal income (top) | 12%Wages & Salary Tax: 6% on the first USD 8,000, 12% above that, on local-source employment income. |
|---|---|
| Corporate income | 12% |
| Capital gains | None (no separate capital gains tax) |
| VAT / PGST | 10% |
| Dividends (WHT) | 0% |
| Interest (WHT) | 0% |
| Royalties (WHT) | 0% |
| Social security (employee) | 7% social security |
| Social security (employer) | 7% social security |
| Wealth tax | None |
| Inheritance / estate | None |
| Property tax | Minimal |
| Other | Gross Revenue Tax for non-PGST-registered persons, plus import duties |
How the system works
- Tax system
- Territorial
- Foreign income
- Largely outside scope (territorial)
- Taxes by citizenship
- No
- Exit tax
- No
- CFC rules
- No
- CRS
- Not participating
A special regime for new arrivals
Territorial in effect, but only for people who are genuinely tax resident in Palau. A digital residency ID does not make anyone tax resident.
Rates checked July 2026: the top marginal income tax rate, the standard VAT rate and the main corporate rate.
Ways to relocate to Palau
The residency and citizenship routes that lead here, weighed against the tax picture above.