Manuel Garrido
Nauru residents are liable to pay Nauru taxes on their income; however, the country’s high income tax threshold and absence of foreign income taxes allow residents to leverage the system for tax planning. Both individuals and companies registered in the Republic of Nauru avoid capital gains, inheritance, or wealth taxes.
If you’re a global investor prioritizing tax efficiency and growing your wealth, Nauru’s tax system is a certified tool for achieving your financial goals. This tax guide provides full insights.
Overview of Nauru’s Tax System
Nauru’s tax system is simple and business friendly. The Nauru Revenue Office enforces tax legislation, and the country’s official currency is the Australian Dollar (AUD), which is used for daily transactions and to pay taxes. The first AUD $110,000 (USD $70,000) of employment income is tax-exempt, with a maximum tax rate of 20 percent.
Corporate taxes are categorized into three types: Small Business Tax (SBT), Business Profits Tax (BPT), and Non-resident Tax (NRT).
The corporate income tax threshold for resident companies starts at AUD $15 million (USD $9.62 million).
Types of Taxes in Nauru
The majority of tax levies in Nauru come from income-based taxation. Tax types and applicable rates are expressed in AUD, the country’s official currency.
Personal income tax
Employees in Nauru pay tax on their income.
Monthly Income | Tax Rate |
$0 to $9,240 | 0 percent |
$9,241 and above | 20 percent |
Nauru imposes a service tax for self-employed individuals and non-tax residents providing services in Nauru. The Nauru service tax rate is charged at the same rate as employment income tax.
Corporate tax
In Nauru, corporate taxes are divided into three categories depending on business structure, revenue, and tax residence status.
Small Business Tax (SBT): SBT is a 2.5 percent gross revenue tax on non-resident individuals conducting business solely in Nauru who earn up to $250,000 annually.
Business Profits Tax (BPT): BPT is a rate-adjusted tax imposed on the income of an individual conducting business in Nauru whose annual earnings exceed $250,000. The tax rates come under four categories.
Category | Business Type | Tax Rate |
Category A | Resident business with gross annual revenue of up to $15 million. | 20 percent |
Category B | Resident business with gross annual revenue of $15 million and over. | 25 percent |
Category C | Resident business operated by a non-resident individual. | 25 percent |
Category D | Non-resident business operating in Nauru. | 25 percent |
Non-resident Tax (NRT): Non-resident individuals who earn income from interest, royalties, or insurance premiums in Nauru pay a 20 percent NRT rate.
Nauru partnerships and trusts have a $250,000 tax-free threshold for each partner or beneficiary before a 20 percent tax rate applies.
Telecommunications Service Tax
The Nauru government imposes a special tax on companies that provide telecommunication services in Nauru. The Telecommunications Service Tax rate is 15 percent of the gross revenue earned from sales of telecommunication services.
Nauru Tax Regulations
The Nauru Revenue Office is the government authority assigned to enforce tax regulations and support the country’s revenue system.
Companies and self-employed individuals who are residents or conducting business in Nauru must register with the Nauru Revenue Office. Entities must maintain accurate financial records for at least five years. Taxpayers must withhold and remit taxes monthly.
How to Pay Taxes in Nauru
Business and self-employed individuals registered in Nauru pay income taxes to the Nauru Revenue Office on the 15th of every month. Employers withhold taxes for their employees and file them using monthly remittance forms.
Companies liable to pay Business Profits Tax in Nauru must submit an annual tax return, which is typically within 90 days after the end of the fiscal year.
Take a look at our Nauru Citizenship by Investment Ultimate Guide
How to become a tax resident in Nauru?
To be classified as a Nauru tax resident, you generally need to reside in Nauru for at least 183 days per year, which requires a valid residence permit. Foreign nationals can obtain a residence permit by being employed by a Nauru company, marrying a Nauru citizen, or gaining Nauru citizenship by investment.
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Frequently Asked Questions about Taxes in Nauru
Is Nauru a tax haven?
Nauru is not considered a tax haven as it imposes income taxes and does not have an offshore banking industry. However, the generous tax-free allowance means many Nauru tax residents avoid paying income taxes.
Does Nauru have property tax?
The Republic of Nauru government does not impose any form of real estate tax.
Is Nauru tax-free?
Nauru is not tax-free, as individuals and businesses pay income taxes.
Is there a departure tax in Nauru?
Foreign nationals who do not hold a Nauru passport must pay a departure tax of AUD $50 when leaving Nauru.
What is Nauru's import tax rate?
The average import tax rate in Nauru is 27.2 percent. Specific tax rates vary by product. For example, there is a 3.5 percent import tax for fruit and vegetables compared to 10 percent for meat and fish. Imported items like refined petroleum and other fossil fuels have higher import tax rates.
