Division of Revenue & Taxation
Commencement moves to January 1, 2027. This is not yet law.
On September 18, 2026 the Secretary of Finance wrote to the people and taxpayer community of the Republic of the Marshall Islands. The memorandum, Update on the Implementation of Tax Reform, says that the Ministry has submitted an amendment to Nitijela to move the implementation date from October 1, 2026 to January 1, 2027. Nitijela has not passed it.The dates in this document are changed to January 1, 2027 under revision marks. If Nitijela does not pass the amendment, reject those revisions and the October 1, 2026 dates stand. Nothing in this document goes to a taxpayer until the amendment is enacted. The Net Profit Tax installment dates are not changed. They turn on a transitional rule for the first tax year, and that rule is flagged where the installments appear.
Welcome to the Division of Revenue and Taxation. We are here to help you!
We aim to create a modern, fairer tax system for the people of the Republic of the Marshall Islands.
Individuals
Tax information for individuals and families.
Businesses
Tax information for businesses and organizations.
Taxes
Tax information and obligations.
Forms & Guides
Tax forms, filing guides, and official instructions.
Key Dates
Important deadlines for tax filings and payments.
Media Releases
News, public updates, and official announcements.
Individuals
What the tax changes mean for you
From January 1, 2027, a Consumption Tax (CT) of 12% is included in the price of most goods and services you buy. Shops must show prices with CT already included, so the price you see is the price you pay. Some items—including certain basic foodstuffs—are exempt or zero-rated, so no CT is added to them.
If you are employed, wages and salaries tax (PAYE) is taken out of your pay by your employer. The rates changed on October 1, 2025: 8% on the first $10,400 you earn in the year, and 12% on anything above $10,400. The first $8,320 you earn in a year is exempt.
If you lease out land you own, a 3% immovable property income tax applies to the rent you receive (this does not include buildings or other structures on the land). The person who pays you the rent withholds the 3% and pays it to DRT. This is a final tax, so once it is withheld your obligation on that rent is met.
You do not need to register or file anything for Consumption Tax—businesses charge it at the point of sale and pay it to DRT.
If you run a business, there are changes to taxes that could apply to you.
Businesses
Large Businesses
Do I need to register for Consumption Tax?
If the total value of your taxable supplies is, or is expected to be, $300,000 or more over a 12-month period you are required to register for Consumption Tax (CT). “Supplies” are the goods and services your business sells. Your “taxable supplies” are the sales that Consumption Tax applies to.
Once registered, you will charge 12% CT on your taxable supplies and issue tax invoices in the approved form. Where an invoice covers taxable, zero-rated, and exempt supplies together, the zero-rated and exempt supplies must be separately identified on the invoice.
Retail prices shown to consumers must be displayed inclusive of CT, so the price on the shelf is the price the customer pays.
You should claim the credit in the CT return for the CT period (calendar month) in which it arises. To do this, you must have the required documentation (e.g., a valid tax invoice). If you do not yet have that documentation, you need to wait until you acquire it before claiming.
Credits must be claimed within 6 months of the period in which they arose. You cannot claim credits on purchases of exempt supplies.
Remember to file and pay within 21 days after the end of the month.
Do I need to pay Net Profit Tax?
Yes, larger businesses are required to pay Net Profit Tax (NPT). From January 1, 2027, NPT replaces Gross Revenue Tax (GRT) for larger businesses in the RMI. If your business is required to register for CT, it will also be required to pay NPT.
Your tax year
For Net Profit Tax, your tax year is the 12 months ending September 30. This is different from Consumption Tax, which you file for each calendar month. A domestic or foreign corporation may, with the approval of the Secretary, use the 12 months ending on the date it balances its accounts instead.
Working out your profit
You work out your net profit on the accrual basis unless the Secretary approves the cash basis. On the accrual basis, you count income when you earn it and expenses when you incur them, even if the money has not yet been received or paid. On the cash basis, you count income when you receive it and expenses when you pay them. Most larger businesses use the accrual basis.
“The Secretary” is the Secretary of the Ministry responsible for finance—in practice, the Division of Revenue and Taxation (DRT), which administers the tax laws.
Installments during the year
- Installments are due on the last day of the month following the end of the 3rd, 6th, 9th, and 12th months of your tax year.
- For a tax year ending September 30, the installments are due on January 31, April 30, July 31, and October 31.
- Each installment is one-quarter of the NPT you estimate to be payable for the year.
- You must file an estimate of NPT payable by the due date for the first installment, and may file a revised estimate during the year.
- If your installments total less than 80% of your actual NPT for the year, a penalty applies—50% of the shortfall if the underestimate was due to fraud or willful neglect, otherwise 10%.
You must file your NPT return within 3 months after the end of the tax year. A domestic or foreign corporation with audited accounts must file its NPT return within 6 months after the end of the tax year. The NPT for the year is due on the date the return is due; installments paid during the year are credited against it.
Medium Businesses
Do I need to pay Gross Revenue Tax?
Yes, you must pay Gross Revenue Tax (GRT) if you carry on business solely in the RMI, you are not registered for Consumption Tax, and your annual total gross revenue is less than $300,000. How much you pay depends on whether your annual total gross revenue is above or below $10,000.
How much will I need to pay?
If your annual gross revenue is over $10,000: $80 for the first quarter, plus 3% of the gross revenue you receive above $10,000, payable quarterly.
You must file a GRT return for each quarter by the last day of the month following the end of the quarter and pay the tax due on that date.
Can I pay Net Profit Tax instead?
If you would prefer to be taxed on your profit rather than your turnover, you may apply in writing to the Secretary to be taxed under Net Profit Tax (NPT) instead of GRT. The Secretary may grant the application, subject to conditions, if satisfied you will keep proper records.
Small Businesses
Do I need to pay Gross Revenue Tax?
Yes, if your small business has annual gross revenue of $10,000 or less, you must pay Gross Revenue Tax (GRT).
How much will I need to pay?
If your annual gross revenue is $10,000 or less: A flat $80 for the year, payable for the first quarter (or the first quarter after you start business).
The $80 is payable once a year, by the last day of the first quarter of your tax year—that is, December 31 for a tax year beginning October 1 (or the last day of your first quarter of business if you start during the year). If your gross revenue for the year is $10,000 or less, you are not required to file a quarterly GRT return.[IP4.1]
Can I pay Net Profit Tax instead?
If you would prefer to be taxed on your profit rather than your turnover, you may apply in writing to the Secretary (the Secretary of the Ministry responsible for finance—in practice, the Division of Revenue and Taxation, which administers the tax laws) to be taxed under Net Profit Tax (NPT) instead of GRT. The Secretary may grant the application, subject to conditions, if satisfied you will keep proper records.
Employers
All employers, irrespective of the number of employees, must register with DRT and must withhold and report wages and salaries tax (PAYE) and remit it to DRT. Wages and salaries tax is paid to DRT once every four weeks (13 times a year), with a return filed within two weeks after the end of each four-week period. Employers must give each employee a written statement, at least once every four weeks, showing the wages and salaries paid to that employee and the tax withheld. Employers must also register with the Marshall Islands Social Security Administration (MISSA) for social security.
For the current PAYE rates, thresholds and the exemption, see Wages and Salaries (PAYE).
Taxes
Consumption Tax (CT/VAT)
It is your responsibility to prepare and submit a true and correct Consumption Tax Return each month. CT returns for a given tax period (e.g., sales and purchases that take place from January 1–31, 2027 inclusive) must be submitted by the 21st following the end of the tax period (e.g., for the tax period January, a return must be filed no later than February 21, 2027).
Only one CT Return should be completed and submitted each month. Please make sure to provide information for each line on the return. If there are any lines for which you have nothing to declare, please enter “0.”
DRT will provide you with more details and information to help you prepare your monthly Consumption Tax Return.
All businesses whose taxable supplies are, or are expected to be, $300,000 or more over a 12-month period must register for Consumption Tax (CT). Government entities and state-owned enterprises that make taxable supplies over that threshold must also register.
CT is a broad-based tax of 12% applied to most goods and services supplied or imported into the Marshall Islands. It is a “user pays” tax, in that the cost is ultimately paid by the end consumer.
Businesses charge CT on their taxable sales and collect that money for the government. They also claim back the CT they are charged on goods and services they buy for their business (known as input tax credits).
CT collected on sales less CT paid on purchases needs to be paid to DRT each month.
Zero-rated supplies
CT is 0% on zero-rated supplies. Input credits are still claimable. Zero-rated supplies include:
- exports of goods
- goods supplied as stores for ships and aircraft leaving the RMI
- goods and services supplied in repairing or treating temporarily imported goods
- services physically supplied for use or consumption outside the RMI (with documentary proof)
- telecommunications services supplied to an overseas telecommunications supplier
- international transport services and related ancillary transport services
- the transfer of an enterprise (or a separable part) as a going concern between two registered persons, where the Act’s conditions are met.
What supplies are exempt?
CT is not charged on exempt supplies and businesses cannot claim input tax credits on purchases of these supplies. Exemptions include:
- financial services
- supply of precious metals
- donated goods or services supplied by a non-profit body
- the sale or long-term lease of residential premises, other than new residential premises
- the lease of residential premises, other than a lease for a term of less than 2 months
- holiday or hotel accommodation provided to an individual under landlord-and-tenant terms for a continuous period of at least 2 months
- supply of unimproved land
- passenger transport services (taxi, mini-van, or ferry, including inter-island ferry, other than by a tour or hotel operator)
- goods referred to in section 206A of the Import Duties Act (renewable-energy and energy-efficiency goods)
- basic foodstuffs used solely for human consumption:
- fresh and evaporated milk
- baby milk
- regular soy milk
- rice
- flour
- fresh, frozen, and canned vegetables
- fresh and frozen fruit
- baby food products
- poultry, other than turkey tails
- canned fish products.
Goods subject to excise tax — including alcohol, tobacco, fuel, and motor vehicles — are not exempt. Consumption Tax applies to them in addition to excise tax, and is charged on the excise-inclusive value of the goods.
Net Profit Tax (NPT)
Net Profit Tax (NPT) is 16% on your taxable income for each tax year. Taxable income is your gross revenue for the year reduced by the deductions the Act allows.
Gross revenue includes amounts derived from sources in the RMI such as business income, gains on disposal of assets, and interest, dividends, royalties, rentals, and fees. It does not include exempt income, amounts subject to non-resident tax or international transport tax, wages and salaries, or the CT you charge and collect from customers.
Effective January 1, 2027, NPT replaces GRT for large businesses
NPT applies to tax years commencing on or after January 1, 2027, and replaces Gross Revenue Tax (GRT) for larger businesses.
NPT applies to a person who has taxable income for a tax year and who is not subject to Gross Revenue Tax. In practice this means businesses registered for CT (annual taxable supplies of $300,000 or more), together with any smaller businesses that have chosen to be taxed on net profit instead of paying GRT.
A person subject to GRT is not subject to NPT, and vice versa.
Deductions, depreciation, and losses
You can deduct expenditure and losses incurred in deriving gross revenue, subject to the non-deductible items in the Act. Contributions to approved retirement funds are deductible within the Act’s limits.
Depreciation is allowed on depreciable assets at the rates set in the Act.
A net loss can be carried forward and offset against future profits.
Gross Revenue Tax (GRT)
Gross Revenue Tax (GRT) is the tax for smaller businesses that are not registered for Consumption Tax. It is a tax on turnover (gross revenue), not on profit.
GRT applies for each quarter to a person who does business solely in the RMI, is not registered for CT, and has annual total gross revenue of less than $300,000.
It also applies to non-residents operating an airline in international traffic, on the gross revenue from passengers, livestock, mail, merchandise, or goods embarked or loaded in the RMI (with exceptions for passengers merely in transit and for transshipment).
How much GRT do I need to pay?
- Annual gross revenue is over $10,000: $80 for the first quarter, plus 3% of the gross revenue you receive above $10,000, payable quarterly.
- Annual gross revenue is $10,000 or less: A flat $80 for the year, payable for the first quarter (or the first quarter after you start business).
- Non-resident airline in international traffic: 3% of the relevant gross revenue, payable quarterly.
Wages and Salaries (PAYE)
All employers are required to withhold wages and salaries tax from their employees’ pay and remit it to DRT. The rates were changed by the Income Tax (Amendment) Act 2025, effective October 1, 2025. The exemption was changed by the Income Tax (Amendment) Act 2026, effective April 2026.
Rates
• 8% on the first $10,400 of wages and salaries (prorated at $200 per week or $866.67 per month)
• 12% on the amount of wages and salaries over $10,400 (prorated by pay period).
• 5% on wages and salaries of United States contractor personnel.
Exemption for wages and salaries
Every employee is allowed an exemption of $8,320 of annual wages and salaries from tax, prorated at $160 per week or $693.33 per month.
An employee with two or more jobs is entitled to only one exemption.
Non-Resident Tax
The Non-Resident Tax is a tax on certain payments made to non-residents. It is collected by withholding at the point of payment and is a final tax on that income.
It applies to non-residents who derive interest, a royalty, a natural resource amount, an insurance premium, a management fee, or a fee for professional or other independent services, from sources in the RMI.
Non-Resident Tax does not apply where the amount is exempt income, or where it is attributable to a business the non-resident carries on through a permanent establishment in the RMI (in which case it is taxed under NPT or GRT).
Rates
- Insurance premium — 5%
- Interest, royalty, natural resource amount, or professional/independent service fee — 10%
- Management fee — 16%
How is it collected?
The person making the payment withholds the tax from the gross amount paid to the non-resident and then files a return and pays the withheld tax to the Secretary. This must be done by the last day of the month following the end of the month in which the amount was paid.
The payer must give the non-resident a tax withholding statement and file an annual withholding tax return. This annual return is separate from, and in addition to, the monthly payments described above — it summarizes the tax withheld over the whole year.
Immovable Property Income Tax
Immovable property income tax is imposed at 3% on the gross income a person derives from the lease of immovable property (land) in the RMI, exclusive of buildings and other structural improvements. It does not apply to income that is exempt income.
It is a final tax collected by withholding. The lessee withholds the 3% from the gross income (rent) paid to the lessor, and files a return and pays the withheld tax to the Secretary by the last day of the month following the end of the quarter in which the payment was made.
Foreign Investment Business License
If you are a non-citizen carrying out business in the RMI, you must hold a Foreign Investment Business License (FIBL).
To obtain the license you must submit an RMI FIBL Application, with required documentation attached, to the Registrar of Foreign Investments and pay the filing fee.
The Reserved List
Some economic sectors, sub-sectors, or activities are on a Reserved List approved by the Cabinet. The Registrar issues a license for a sector or activity not on the Reserved List; if the proposed investment is in a reserved sector, the application is denied. Where it is unclear whether a sector is reserved, the Registrar seeks the written opinion of the relevant ministry.
A change of ownership is reviewed in the same way as a new application; a license may be varied or transferred on payment of the prescribed fee. A certified copy of an annual report is required.
Operating without a license
Carrying on business without the required license can result in a civil penalty of up to $50,000, and a separate offense provision allows a fine of up to $10,000, or imprisonment, or both.
Forms & Guides
Marshall Islands Tax Administration System (MITAS)
Why should I use this portal?
The MITAS (Marshall Islands Tax Administration System) portal has been created to ensure Marshall Islands has a tax system that is modern and equitable.
The portal is a simpler, faster, and more secure way for you to register and file tax returns. It
will make it easier for you to receive and send information to the Division of Revenue and Taxation.
Rather than completing paper forms or visiting government offices, the portal allows you to submit and store all your tax information electronically. This ensures a fairer system for all taxpayers.
Key Dates
Related to new tax laws
- August 1 – September 30, 2026 — transitional registration period for CT.
- January 1, 2027 — Consumption Tax and Net Profit Tax commence; the repealed taxes end.
- February 21, 2027 — first CT return due (for the January 2027 period).
- January 31, 2027 — first NPT installment due (for a tax year beginning October 1, 2026).
Recurring dates
- CT returns — monthly, within 21 days after the end of each calendar month.
- NPT installments — last day of the month following the 3rd, 6th, 9th, and 12th months of the tax year (January 31 / April 30 / July 31 / October 31 for a September 30 year end).
- NPT annual return — within 3 months of year-end (6 months for corporations with audited accounts).
- GRT returns — quarterly, by the last day of the month following the end of the quarter.
- Non-resident tax — remitted by the last day of the month following the month of payment.
- Immovable property income tax — remitted quarterly, by the last day of the month following the end of the quarter.
Tax Reform zone
Changes to Tax Laws
From January 1, 2027, the Marshall Islands moves to a simpler system that taxes profit and consumption rather than stacking taxes.
The main elements are:
- Consumption Tax (CT) — 12% on most goods and services.
- Net Profit Tax (NPT) — 16% on the net profit of larger businesses.
- Gross Revenue Tax (GRT) — Retained, in a lighter form, for smaller businesses not registered for CT.
- Immovable Property Income Tax — 3% on income from leasing land.
- Non-Resident Tax — Withholding on certain payments to non-residents.
- Wages and Salaries Tax (PAYE) — Rates changed by the Income Tax (Amendment) Act 2025; the exemption changed by the Income Tax (Amendment) Act 2026.
- Excise Tax and Import Duty — Import duty is retained (not reduced to nil).
The old non-resident income tax, tax incentives, local government tax, and holiday and resort facilities tax are being removed.
Media Releases
Tax Laws Are Changing in The Marshall Islands (Insert Date)
New tax laws will be implemented in the Marshall Islands from January 1, 2027, with major changes to how businesses register for and collect taxes.
<insert name of official> from the Division of Revenue and Taxation (DRT) says the changes will create a more modern and fairer tax system for all.
“Our current system needs updating. We have taxes stacked on taxes which add to the price of everyday goods, and there is a big administrative burden on businesses as the current laws are hard to comply with due to complex rules and the uneven nature of the taxes,” he/she said.
Under the tax changes, businesses with taxable supplies of $300,000 or more will be required to register for Consumption Tax (CT) and will be affected by changes to Net Profit Tax (NPT) and Wages and Salaries Tax (PAYE).
“The new laws will introduce a single, transparent CT at 12 percent. Registering for CT will benefit your business as it will make it easier to do transactions with large taxpayers who want to work with CT-registered businesses. As a registered business, you can also reclaim tax paid on your inputs, which will reduce your overall tax burden and improve your cash flow,” he/she said.
Businesses with annual total gross revenue of less than $300,000 that are not registered for CT will continue to pay Gross Revenue Tax (GRT). Small businesses with annual total gross revenue of $10,000 or less will pay GRT of $80 for the year.
All employers will be affected by the new tax laws, which will require employers to withhold and remit PAYE.
DRT is working on creating step-by-step guides for all those businesses that will be affected by the new tax laws.
Staff from DRT will soon begin visits to business owners to provide more information.