Gain full insight into Vanuatu taxes for individual tax residents and international companies, including tax rates, the tax system, and exemptions.

Vanuatu is a strategic jurisdiction for tax purposes. The country does not impose income tax, capital gains, inheritance, or wealth taxes. The framework of Vanuatu taxes allows individuals and legal entities to grow their wealth.

Vanuatu Tax Benefits

  1. vanuatu tax certificateZero income taxes: Vanuatu has a long-standing reputation as a tax haven, allowing individuals and legal entities to remain tax efficient through minimal taxation. There are no direct taxes on individuals, whether Vanuatu residents or international investors, and no corporate taxes on income.
  2. Low indirect taxes: Though the income tax rate in Vanuatu is zero, tax residents must pay indirect taxes, such as Value Added Tax (VAT) and taxes on property transactions. However, indirect tax rates are typically lower than in other countries in the South Pacific Ocean.
  3. Tax friendliness: Capital export tax, capital gains tax, inheritance tax, personal income tax, annual property tax, and wealth tax are not charged in Vanuatu. Vanuatu is safe to establish tax residency for tax purposes.
  4. Favorable business conditions: Vanuatu encourages foreign investment and business ventures by allowing companies to register in Vanuatu and avoid paying taxes for 20 years, instead paying an annual fee of $300.

Vanuatu Taxes for Individuals

Vanuatu’s zero income taxation policy for individual residents and non-residents means there is not requirement to pay income taxes. Individuals with Vanuatu tax residency are not required to submit annual tax returns to the Vanuatu Customs and Inland Revenue Department (CIRD), whether they earn income abroad or in Vanuatu, unless the the income is earned through rent.

Vanuatu isn’t an entirely tax-free country, as individuals will pay tax indirectly, including value-added tax (VAT). Employees in Vanuatu contribute four percent of their gross income to the country’s Social Security fund. The only income tax levied is on rental income, at 12.5 percent.

The table below outlines the tax rate by category for companies registered in Vanuatu:

Tax Type

Tax Rate

Annual registration fee

$300 to $1,000

Sociel Security (pension fund) contribution

Six percent

Corporate tax

Zero percent

Property Taxes in Vanuatu

Property ownership 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 12.5 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

Fivepercent

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 exceeding VT 200,000 (about $1,600). 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 VT 200,000 ($1,800), then rental income tax is not charged. If the rental income for six months exceeds VT 200,000, a 12.5 percent income tax is charged.

Rental tax for companies

Rental income tax rules for companies differ from those for individuals. If a company owns a property in Vanuatu and rents it out, a 12.5 percent tax is charged on all rental income.

Tax Reporting in Vanuatu

If you own an international company in Vanuatu, you must 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).

Privacy in Vanuatu is respected, and data protection for 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.

Additionally, Vanuatu meets the requirements of the Financial Action Task Force (FATF), a global organization that combats money laundering and prevents illegal financial activities. Vanuatu has Tax Information Exchange Agreements (TIEAs) with several countries, providing financial information upon request for criminal or civil tax investigation. The following countries concluded TIEAs with Vanuatu:

  • Australia
  • Denmark
  • Faroe Islands
  • Finland
  • France
  • Grenada
  • Iceland
  • Ireland
  • New Zealand
  • Norway
  • Republic of Korea
  • San Marino
  • Sweden

Vanuatu does not have double taxation conventions (DTCs). This means that remitting earnings from foreign income sources is not subject to double taxation in Vanuatu; however, you may be required to pay tax if you transfer money from income earned in Vanuatu to another country.

How to become a tax resident in Vanuatu?

indirect taxes in vanuatuTo be classified as a Vanuatu tax resident, you generally need to:

  • Reside in Vanuatu for at least 183 days per year
  • Have a valid residency permit through a:
    • Self-Funded Resident Visa
    • Leasehold Holder Visa
    • Spouse Visa
    • Employment
    • Citizenship by investment
  • Establish a permanent address in Vanuatu (rented or owned).
  • Demonstrate economic and social ties, such as a local bank account, business activities in the country, whether local or international trade, or property ownership.

Residents can obtain a Vanuatu permanent resident visa after ten years of residency.

Vanuatu citizenship by investment program

The Vanuatu citizenship by investment program is a fast route to Vanuatu tax residence status. Foreign nationals contributing to the country’s economy can apply for citizenship without fulfilling residency requirements, language tests, or in-person interviews.

Applicants must fulfill the following criteria:

  • Be 18 or over
  • Have a clean criminal record
  • Provide a medical clearance certificate
  • Have a bank balance of at least $250,000

The minimum investment required is $130,000, and investment options include:

  • Contribution to the Development Support Program (DSP)
  • Approved real estate purchase through the Real Estate Option Program (REO)
  • Donation to the CIIP (Capital Investment Immigration Plan)

Successful applicants obtain a Vanuatu passport and can utilize Vanuatu’s tax system to pay lower taxes.

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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, the value-added tax (VAT) is 15 percent.

Is Vanuatu still a tax haven?

Vanuatu is considered a tax haven because the income of citizens and residents is entirely free of local taxes, whether earned abroad or within the country. Vanuatu is a zero-tax jurisdiction, free of personal income tax, capital gains tax, inheritance tax, and wealth tax.

What taxes are paid in Vanuatu?

Taxes paid to the Government of Vanuatu include stamp duty, value-added tax (VAT), rental income tax, and Social Security tax.

What is the income tax rate in Vanuatu?

Vanuatu is a pure tax haven with no income taxes, so its income tax rate is set to zero.

What property taxes are paid in Vanuatu?

There are no direct taxes on property owners in Vanuatu besides stamp duty when property ownership is transferred. If property owners rent out their property, they’ll be required to pay ta on their rental income.

Is there a Vanuatu tax on non-residents?

Neither residents nor non-residents pay personal income taxes in Vanuatu.