Tax System in Vanuatu

Vanuatu is an island nation in the South Pacific. It is regularly ranked as one of the happiest places to live on the planet, and because it offers an immigration by investment option, it is a popular destination for people looking for a new place to call home.

It’s very easy to put Vanuatu high on your list of options, when you look at the turquoise water tropical forests and white sand beaches. But there’s always a little bit more to consider when you’re planning a move to a new country. Chances are you are interested in the tax system in Vanuatu and how it will affect your assets and earnings. Here’s what you need to know:

Tax Types in Vanuatu

like most countries Vanuatu has a complex tax system with different taxes for individuals, for corporations, for retirees, and in other situations. let’s breakdown the text system in Vanuatu so you can see exactly what will apply to you.

Individual Taxation in Vanuatu

The good news for individuals who choose to make Vanuatu their home, is that under the current Vanuatu tax system, there is no tax on income. There are also no capital gains taxes or tax on estates and inheritances. Which might contribute to Vanuatu’s status as one of the happiest places in the world.

However, it is also worth noting that Vanuatu doesn’t have any double taxation agreements in place with any countries. So, on it’s fairly easy to become a tax resident in Vanuatu and avoid paying any local tax, your primary or initial country of residence may still require you to pay taxes on your global income there. Which might make becoming a citizen of Vanuatu a more attractive proposition if it will allow you to renounce your primary citizenship and avoid those taxes.

As always when you are immigrating to a new country you should speak to the tax authorities in both your new country and your original country of residence to find out what the tax burden in each will be. Different countries have different regulations, and it will depend on the combination of countries that apply.

Even individuals who are tax residents in Vanuatu are required to contribute 6% of their earnings to a government approved superannuation scheme.

Corporate Taxation in Vanuatu

Corporate taxes in Vanuatu are also very low, with most of the corporate tax burden applying to imports and exports. You will also have to have a business license to operate in Vanuatu, but again there are no capital gains and other taxes to worry about. This makes Vanuatu as close to a corporate tax haven as you can get. Even the duties on imports and exports are fairly low however with the current rate being around 5%.

The only type of tax that you will have to worry about when you set up a business in Vanuatu is VAT or value added tax.

VAT was added to the tech system in 1998, and since 2005 the rate has been 12.5%.

Tax Incentives in Vanuatu

The downside of living in as closest possible to a true tax haven, is that because you are not paying any income tax, there aren’t many tax incentives. So, you will need to take care of your own health care education and other expenses. 

Of course, with the money that you save by not paying tax, you can easily afford to pay for those services.

Tax Refunds in Vanuatu

With no income tax for corporations or individuals in Vanuatu under the tax system in Vanuatu, there are no income tax returns and therefore no tax refunds.

However, if you save the money that you would have paid for tax, you will earn interest on that money instead.

Businesses that charge VAT on their products and services and are registered for that, can usually complete a VAT return to reconcile the value added tax they have paid versus the value added tax that they owe. 

Let’s just say however that because of the tax system in Vanuatu, this is pretty much the easiest tax season you’ll ever experience.

Benefits of the Vanuatu tax system

The tax system in Vanuatu is very simple and basically non-existent. As an individual you will pay value added tax on items and services that you buy and have your super attenuation contribution deducted from any earnings, but other than that there’s not much to worry about.

The same goes for businesses that operate within Vanuatu. It’s a very simple system with a very low tax burden for companies.

The only complication comes in we’re individuals or businesses have a tax presence in more than one country. So, if you are planning to move to Vanuatu it’s worth considering making it your sole base.

Vanuatu Citizenship Program Overview

Vanuatu used to have a fairly weak passport that limited the option for visa free travel. However recent changes and treaties have meant that you can now travel on a Vanuatu passport to up to 130 countries without requiring a visa. While that’s not as strong as some other countries passports, it is more than enough for most people.

Vanuatu is also part of the British Commonwealth, which means extended stays in Commonwealth countries including the United Kingdom are possible on a Vanuatu passport. 

With a very favorable tax system in Vanuatu combined with a laid-back island lifestyle, this makes this small island nation a very attractive place to put down roots. The government of Vanuatu also once foreigners to make the country then you home.

Which is why they have made their immigration by investment program very simple to navigate.

Currently any individual can apply for citizenship in Vanuatu provided they are over 18 years old an have a non-refundable donation of 130,000 U.S. dollars to make to the government. You will still be required to meet all criminal and security related checks, but provided you are eligible, you can become a citizen of Vanuatu in a relatively short time.

The whole process from beginning to end can take as little as six to eight weeks. So, if you are dreaming of retiring or moving to an island paradise, you could make that dream a reality within two months.

FAQ

Where is Vanuatu?

What two is an island nation in the South Pacific about 1750 kilometers from Australia.

The nation consists of 83 volcanic islands of varying sizes. Some of these islands an inhabited and have fairly large towns, while others are home to little more than tropical forests and local animals. 

How many people live in Vanuatu?

Vanuatu is one of the smallest countries population wise in the world. In fact, the island nation is currently home to a little over 300,000 people in total. Which means even though there are towns like Port Vila and Luganville on some of the larger islands, there are no big cities like you would expect to see in other countries.

Is Vanuatu family friendly?

Vanuatu is a popular family tourist destination, which means children and younger families will certainly enjoy the adventurous outdoorsy lifestyle. However, the lack of access to some of the modern amenities you might be used to at home could be a problem for some families. it is a good idea if you are considering a move to Vanuatu on your own or with your family, to plan a trip before you make the move. This will allow you to get a feel for the islands and whether you can make the lifestyle work.

What is healthcare like in Vanuatu?

Health in Vanuatu is limited by comparison to other countries. There are five public hospitals and one private hospital scattered throughout the islands as well as various other health centres. However, while you can access basic medical care on the islands, if you have complex health needs you may need to travel to have them attended to. be sure you factor that into your considerations before making Vanuatu your home.

What is education in Vanuatu like?

Vanuatu education is not what you would expect in a developed country. For one thing it’s not compulsory. For another it can be difficult to access depending on where you live. Public education is free to the people of Vanuatu but does has its limitations. Are there some limited treaty education options on Vanuatu, but the country does also have an LTE wireless network system, which does provide access to international online education, if you are located close to a large town. So, if you or member of your family hopes to complete their studies while living on Vanuatu, you should take this into account.

Is the money I invest to obtain citizenship refundable?

No. Unlike some citizenship by investment schemes, obtaining citizenship in Vanuatu requires you to make a nonrefundable donation to the government.

Can I keep my primary citizenship?

Yes, when you choose to become a citizen of an O2 you can retain your primary citizenship and remain a dual citizen. However, while this will allow you to take advantage of the tax system in Vanuatu for your local affairs, you may still be subject to taxation in your primary country as well. So, if you are planning to become a citizen of Vanuatu to benefit from their tax system, it’s important to investigate this before you decide.

Contact Us