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Republic of Naoero tax system 2026
Republic of Naoero offers a simple and investor friendly tax system, designed to support residents, businesses, and global investors. With low personal and corporate tax rates, no foreign income taxes, and exemptions for capital gains, inheritance, and wealth, Naoero is considered one of the most tax-efficient jurisdictions in the Pacific region. The country’s official currency is the Australian Dollar (AUD), which is used for all domestic transactions, including tax payments. The Naoero Revenue Office oversees tax legislation and ensures compliance.
1. Personal Income Tax
Residents ofNaoero are liable for personal income tax, but the system is very favorable due to a high tax-free threshold. In Naoero, residents enjoy a highly favorable personal income tax system. Monthly incomes up to AUD $9,240 are completely exempt from tax, while any income above this threshold is taxed at a flat rate of 20%.
Service Tax : Self-employed individuals and non-tax residents providing services in Naoero are subject to a service tax, charged at the same rate as employment income tax (20% for earnings above the threshold).
2. Corporate Tax
Corporate taxes in Naoero are categorized into Small Business Tax (SBT), Business Profits Tax (BPT), and Non-resident Tax (NRT).
Small Business Tax (SBT) : For non-resident individuals conducting business exclusively in Naoero, a Small Business Tax (SBT) applies. This tax is levied at 2.5% of gross revenue, provided their annual earnings do not exceed AUD $250,000.
Business Profits Tax (BPT) : BPT is applied based on business structure, revenue, and residency status.
| Category | Business Type | Tax Rate |
|---|---|---|
| A | Resident business with gross annual revenue up to $15 million | 20% |
| B | Resident business with gross annual revenue $15 million and over | 25% |
| C | Resident business operated by non-resident individual | 25% |
| D | Non-resident business operating in Naoero | 25% |
Non-resident Tax (NRT) : Non-resident individuals who earn income in Naoero from sources such as interest, royalties, or insurance premiums are subject to a standard Non-Resident Tax. The applicable tax rate for these earnings is 20%.
Partnerships and Trusts: In Naoerou, partnerships and trusts benefit from a tax-free threshold of AUD $250,000 for each partner or beneficiary. Any income exceeding this threshold is subject to a 20% tax rate.
3. Telecommunications Service Tax
Naoero imposes a special tax on telecommunications services, a special telecommunications Service Tax on companies providing telecom services within the country. The tax rate is 15% of gross revenue, applied directly to earnings rather than profits, making it predictable and easy for service providers to manage.
4. Capital Gains, Inheritance, and Wealth
Naoero does not levy taxes on capital gains, inheritance, or wealth. These exemptions make Naoero attractive for wealth preservation, estate planning, and long-term investment strategies. This includes:
In Naoero, individuals are considered tax residents if they live in the country for a specified period or engage in employment or business activities locally. Tax residents benefit from local exemptions and income thresholds, whereas non-residents are taxed only on Naoero-sourced income. All taxes are denominated in Australian Dollars (AUD) and paid directly to the Naoero Revenue Office, making the system straightforward and minimizing compliance costs.