Taxes in Vanuatu

VAT generally applies at 15% to taxable goods and services supplied in Vanuatu and to imports. A business must register when taxable supplies exceed or are expected to exceed VT4 million in a 12-month period; voluntary registration is available below that level. Financial services, approved education, certain non-profit supplies, long-term residential accommodation and qualifying residential-property sales are exempt. Exports, international transport and certain services supplied to non-residents can be zero-rated. Exempt supplies do not carry output VAT and normally do not generate input credits, while zero-rated supplies carry a 0% rate and can preserve input-credit access. VAT returns and payments are generally due by the 27th of the following month, with a special deadline of 5 January for the period ending 30 November; an approved quarterly filing option may apply below VT8 million in annual taxable supplies. A valid tax invoice supports an input credit, and a customer can request one within 28 days. Rent Tax applies to gross rental income for each six-month period at 12.5%. A natural person receives a VT200,000 tax-free threshold per period, while a company or trustee company has no equivalent threshold and expenses cannot be deducted. The periods run from 1 December to 31 May, due on 28 June, and from 1 June to 30 November, due on 28 December. Long-term residential rent is generally covered by Rent Tax, while commercial and short-term residential rent is generally subject to VAT; a landlord below the VAT registration threshold may fall under Rent Tax instead. A profit-making business generally needs a business licence and a TIN. DCIR issues licences in Port Vila, Luganville and Lenakel, while provincial governments handle areas outside municipal boundaries. A new licence runs from the start date to 31 December and is charged pro rata; annual renewal is generally due by 31 January. The fee depends on the activity category and gross turnover. Foreign-owned businesses need valid VFIPA approval, and companies or trade names need the relevant Vanuatu Financial Services Commission certificate. Some sectors require additional documentation, including mining, logging, banking, insurance, health, law and tobacco. Exemptions can apply to organisations such as non-profit clubs, religious missions, exporters and registered credit unions. The former F4 turnover tax was repealed from 1 January 2020. A 5% commercial-bank business-licence fee remains, but a separate general 5% turnover tax should not be assumed without confirmation from DCIR. Import duty depends on the applicable HS2022 tariff item. Customs calculates the customs value from cost, insurance and freight using the monthly customs exchange rate. Import VAT is 15% of the customs value plus import duty, and a declaration normally carries a VT1,000 customs service fee. Customs clearance is handled by a licensed customs agent or a licensed regular importer. Excise applies to specified goods, including alcohol, tobacco and fuel. Concessions and exemptions apply only when the precise tariff conditions are met. Exports are generally zero-rated for VAT, but customs and tariff requirements remain separate. Stamp duties apply to defined instruments and transfers, including leases, share transfers, sales transfers and marketable securities. Their existence does not create a general income tax or capital-gains tax. Businesses and property investors must keep invoices, purchase orders, delivery records, receipts, contracts, customs documents and other source records for at least five years after the relevant tax period. Records may be kept in English, French or Bislama, and entities must maintain accessible beneficial-owner information. The TIN system has applied since 1 January 2020. VAT persons, Rent-Tax filers, business-licence holders, vehicle or road-tax licensees and driver-licence applicants generally require a TIN. Individuals obtain it with certified identification, personally or through a tax representative, and changes must be reported within 21 days. A permanent departure from Vanuatu must be reported at least 14 days before departure. Late VAT or Rent-Tax returns, late payment, incorrect returns and unpaid assessments can lead to fixed penalties, daily charges, a 5% late-payment charge and interest at 20% per year. A tax shortfall can attract a penalty commonly set at 20%, rising to 75% for deliberate or reckless conduct, with possible reductions for voluntary disclosure. DCIR can issue default, advance or amended assessments, conduct audits and offset refunds against other tax debts. A registered tax agent is required to file returns, represent taxpayers or lodge objections on their behalf. A taxpayer generally has 28 days to submit a Notice of Objection stating the grounds and requested correction. Undisputed tax remains payable, and an arrangement or security is generally required for disputed tax, often involving 50% of the disputed amount. DCIR aims to decide an objection within 30 days. A Revenue Tribunal is provided for in the system; if it is not operating, an appeal may proceed to the Supreme Court within 28 days. The appellant carries the burden of proof. Vanuatu's international tax administration focuses on exchange of information rather than a domestic income-tax allocation system. The Director of DCIR acts as Competent Authority, and the EOI Unit supports international cooperation under the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, tax information exchange agreements and the Common Reporting Standard. Reporting financial institutions register between 1 February and 31 March and submit annual reporting data by 31 May. The absence of local income tax does not remove duties relating to CRS reporting, beneficial ownership or accounting information. A residence state's tax rules may still apply to income connected with Vanuatu, and those foreign obligations cannot be resolved by Vanuatu's domestic tax system alone.