How corporate tax works in Marshall Islands
Marshall Islands taxes incorporated and unincorporated businesses under a national gross-revenue tax. The tax is based on turnover, not net profit, so expenses and losses do not generally reduce the base in the way they would under a conventional corporate income tax.
The statutory charge is $80 per year on gross revenue up to $10,000 and 3% on the portion above $10,000. Businesses generally file and pay by the last day of the month following each quarter, although the Secretary of Finance can approve monthly or biweekly arrangements.
A 2025 reform package is intended to replace part of the current turnover-and-import-duty model with a VAT and a business-profit tax for larger businesses. IMF reform material targets a 10% VAT from October 2026, but commencement and implementation should be confirmed before filing under the new system.
Tax rates at a glance
- Gross-revenue tax
- 3%Turnover tax
- Corporate tax
- 3% of gross revenue
- Gross revenue up to $10,000
- $80 per year
- Government contract withholding
- 3%
- Proposed VAT
- 10%
- Proposed business profit tax
- Reform package
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
Local operating businessesFishing and tourism companiesMaritime groupsExport-oriented projectsBusinesses with high margins
Watch out for
- A gross-revenue tax can be expensive for low-margin businesses because it applies even when the company has little or no accounting profit. It can also cascade through supply chains when businesses buy and resell taxable inputs.
- Businesses with local and foreign activity are presumed to have Marshall Islands-source gross revenue unless they file for apportionment under the Income Tax Act. Source records and transaction-level books therefore matter.
- Qualifying new businesses in offshore or deep-sea fishing, export manufacturing, agriculture, and hotel or resort facilities can qualify for a five-year gross-revenue-tax holiday if the statutory investment or local-employment conditions are met.
- A future VAT or business-profit-tax filing will not automatically make the current gross-revenue tax disappear for every business. The 2025 reform design distinguishes businesses that enter the new regime from smaller businesses that remain outside it.
Frequently asked questions
What is the corporate tax rate in Marshall Islands?
The current main business tax is a 3% gross-revenue tax on the portion of annual revenue above $10,000, plus an $80 annual charge for revenue up to $10,000. It is not a conventional tax on corporate profit.
Does Marshall Islands have a 0% corporate tax?
Not exactly. There is no separate current profit-based corporate income-tax rate, but companies carrying on local business generally face the 3% gross-revenue tax, payroll charges, import duties, licences, and other taxes.
Is Marshall Islands introducing a VAT?
The 2025 consumption-tax reform package is intended to introduce a VAT and a business-profit-tax framework, with IMF materials describing a planned 10% VAT from October 2026. The effective date and operational rules should be checked with the Ministry of Finance.