Tax system in Marshall Islands
Marshall Islands has a small, source-based tax system administered by the Ministry of Finance. The main national taxes are wage and salary tax, business gross-revenue tax, import duties, non-resident withholding, hotel tax, and selected excise taxes.
Employees generally face 8% on the first $10,400 of annual wages and 12% above $10,400 from October 1, 2025. Employees earning $8,320 or less are exempt, but the Ministry says the exemption is lost when annual wages exceed $8,320.
Businesses usually pay 3% gross-revenue tax on revenue above $10,000, rather than a tax on accounting profit. There is no national VAT in the current system, although the 2025 consumption-tax package is intended to support a VAT and business-profit-tax transition from October 2026.
There is no national sales tax in the current system. IMF reform analysis reports local taxes including 4% Majuro retail sales tax, 3% Majuro professional-services tax, 10% Kwajalein wholesale tax, and separate local hotel, rent, fuel, alcohol, tobacco, and property charges.
Tax rates at a glance
- Income tax
- 8% - 12%Wage tax
- Wealth tax
- 0%
- Inheritance tax
- 0%
- Capital gains tax
- 0%
- Corporate tax
- 3% of gross revenue
- Dividend tax
- 0%
- VAT
- 0% currently
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
Local employersShipping and maritime groupsFishing and tourism businessesInvestors seeking low direct taxesUS-connected operators
Watch out for
- The headline rates are not the full burden. Import duties, local sales taxes in Majuro and Kwajalein, hotel taxes, excise duties, business licences, and social-security contributions can materially affect the cost of operating in the Republic.
- The national hotel tax is 8% of the daily room rate. Local governments can impose additional hotel or accommodation taxes, so a tourism business should model both layers.
- The wage-tax exemption has a cliff effect: the Ministry of Finance says employees earning more than $8,320 are not eligible for the exemption. Payroll calculations should therefore be checked against the current withholding instructions.
- Marshall Islands was removed from the EU list of non-cooperative tax jurisdictions in 2023 and is not on the February 2026 Annex I or Annex II lists, but its treaty network is still limited and international reporting obligations remain important.
- The 2025 consumption and excise laws are part of an evolving reform program. Do not treat the planned October 2026 VAT or business-profit-tax framework as a current 2026 rate without confirming commencement and implementing guidance.
Frequently asked questions
What is the income tax rate in Marshall Islands?
The current wage-tax rates are 8% on the first $10,400 of annual wages and 12% above $10,400. Employees earning $8,320 or less are exempt, while the Ministry of Finance says the exemption is unavailable once annual wages exceed $8,320.
Does Marshall Islands have corporate tax?
Marshall Islands does not currently use a conventional profit-based corporate income tax as its main business tax. Businesses generally pay a 3% gross-revenue tax on revenue above $10,000, with an $80 annual tax for revenue up to $10,000.
Does Marshall Islands tax dividends or capital gains?
Current IMF analysis describes dividends, interest, and capital gains as generally untaxed in Marshall Islands. A business carrying on taxable local activity, or the taxpayer's home country, can still create a separate tax issue.