How dividend tax works in Marshall Islands
Marshall Islands generally does not levy a separate tax on dividends paid by a Marshall Islands company. Current IMF analysis places dividends among the forms of capital income that are generally untaxed in the Republic.
That does not mean a company is tax-free before making a distribution. A local business can owe the 3% gross-revenue tax, payroll charges, import duties, licences, and other operating taxes before any dividend is paid.
A non-resident shareholder should also check the shareholder's country of residence, the company's place of management, and any reporting or beneficial-ownership requirements. Marshall Islands has information-exchange agreements but only a limited conventional treaty network.
Tax rates at a glance
- Dividend tax
- 0%Generally exempt
- Dividend withholding tax
- 0% generally
- Company gross-revenue tax
- 3%
- Shareholder home-country tax
- Depends on residence
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
ShareholdersHolding companiesMaritime groupsFamily investorsCross-border owners
Watch out for
- A 0% Marshall Islands dividend rate does not cancel tax in the shareholder's home country. Many residence countries tax dividends even when the source country does not withhold.
- The company-level 3% gross-revenue tax is not a dividend tax and is not calculated on profit. It can apply to local business activity regardless of whether the company distributes its cash.
- Shipping-company and vessel structures can have special source, registration, treaty, and management questions. Registration in the Republic is not by itself proof that all shareholder income is Marshall Islands-source.
- Dividends, ownership changes, and cross-border payments can still trigger banking, CRS, beneficial-ownership, and economic-substance reviews even when no withholding tax is due.
Frequently asked questions
Does Marshall Islands tax dividends?
Current sources indicate no general Marshall Islands dividend tax or dividend withholding tax. The company can still owe gross-revenue and other business taxes, and the shareholder's residence country may tax the distribution.
Are dividends from a Marshall Islands company tax-free?
They are generally not taxed by Marshall Islands under the current national system, but tax-free in the source country does not mean tax-free overall. Check the shareholder's residence, citizenship, controlled-company, and reporting rules.
Is there withholding tax on payments to foreign shareholders?
No general dividend withholding tax has been identified in the current sources. Other payments, especially fees for services supplied by non-residents, can be subject to the separate 10% non-resident gross-income tax.