Oceania & Pacific
Palau: tax at a glance
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.
Ways to relocate to Palau
The residency and citizenship routes that lead here, weighed against the tax picture above.
The taxes
- Personal income (top)
- 12%
- 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
The rates below are indicative headline figures (top marginal, standard, and headline rates), reviewed 2026-07. Brackets, surcharges, and state, provincial or cantonal taxes vary. Treat this as a reference map, not advice.
Sources (1)
Frequently asked
What is the income tax rate in Palau?
The top marginal personal income tax rate in Palau is 12%. Wages & Salary Tax: 6% on the first USD 8,000, 12% above that, on local-source employment income.
What is the corporate tax rate in Palau?
The headline corporate income tax rate is 12%.
Does Palau tax capital gains?
Capital gains for individuals: None (no separate capital gains tax).