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FM

Micronesia

Micronesia USD

FM · FSM · #176 · 7 cities

Nomad score 39/100 Compare
Top income tax 10.0% Territorial system
Corporate tax 3.0%
VAT/GST None standard rate
Tax residency —

Micronesia tax profile

Data year: 2026

Tax system
Territorial The national government taxes employment income through a wage-and-salary withholding tax, most business activity through a gross revenue tax (GRT), and imports through customs duties. There is no national VAT or general sales tax; Yap, Chuuk, Pohnpei and Kosrae levy their own sales, hotel and licence taxes. FSM-incorporated “major corporations” meeting capitalization thresholds may instead pay 21% corporate income tax on taxable income and be exempt from GRT for years in which that tax is remitted. Currency is the US dollar.
Top PIT rate
10.0%
Corporate tax rate
3.0%
VAT/GST
No VAT/GST
Capital gains tax
No Capital Gains Tax
Social security (employee)
Rate not recorded
Social security (employer)
Rate not recorded
Dividend withholding
Rate not recorded
Interest withholding
Rate not recorded
Royalty withholding
Rate not recorded
Treaty count
Treaty count not recorded
Tax authority: Customs & Tax Administration, Department of Finance and Administration Website

Income tax brackets

Corporate
Corporate brackets
Bracket min Bracket max Rate USD equivalent
USD 10,000 and above 3.0% $10,000 +
Personal income
Personal income brackets
Bracket min Bracket max Rate USD equivalent
USD 0 USD 11,000 6.0% $0 – $11,000
USD 11,001 and above 10.0% $11,001 +
Local currency: USD

Tax flags

Territorial Exemption

Tax residency

Residency rules
Taxation follows the type of income and source rules in Title 54 rather than a single day-count residency test. Wages and salaries are taxed when received by an employee; services performed partly in and partly outside the FSM are presumed fully FSM-source unless apportioned (§124). Businesses apportion GRT when operating inside and outside the FSM (§142).
Exit tax
No
CFC rules
No

Filing information

Fiscal year
01-01 – 12-31
Filing deadline
Gross revenue tax: last day of month after each calendar quarter (Apr 30, Jul 31, Oct 31, Jan 31)
Employers withhold wage tax at source. Businesses pay GRT quarterly, due on the last day of the month following each calendar quarter. Major corporations file annual income-tax returns under Chapter 3.

Sources

Change history

    • Income tax brackets updated

    Refreshed from FSM Code Title 54 and DoFA corporate-tax chapter; added PIT/GRT brackets, sources, prose sections; corrected national VAT and CIT headline (https://www.fsmlaw.org/fsm/code/title54/T54_Ch01_SubChpII_2014.html) Source

    • Income tax brackets updated

    Refreshed from FSM Code Title 54 and DoFA corporate-tax chapter; added PIT/GRT brackets, sources, prose sections; corrected national VAT and CIT headline (https://www.fsmlaw.org/fsm/code/title54/T54_Ch01_SubChpII_2014.html) Source

    • Income tax brackets updated

    Refreshed from FSM Code Title 54 and DoFA corporate-tax chapter; added PIT/GRT brackets, sources, prose sections; corrected national VAT and CIT headline (https://www.fsmlaw.org/fsm/code/title54/T54_Ch01_SubChpII_2014.html) Source

    • Income tax brackets updated

    Refreshed from FSM Code Title 54 and DoFA corporate-tax chapter; added PIT/GRT brackets, sources, prose sections; corrected national VAT and CIT headline (https://www.fsmlaw.org/fsm/code/title54/T54_Ch01_SubChpII_2014.html) Source

    • Income tax brackets updated

    Refreshed from FSM Code Title 54 and DoFA corporate-tax chapter; added PIT/GRT brackets, sources, prose sections; corrected national VAT and CIT headline (https://www.fsmlaw.org/fsm/code/title54/T54_Ch01_SubChpII_2014.html) Source

    • Income tax brackets updated

    Refreshed from FSM Code Title 54 and DoFA corporate-tax chapter; added PIT/GRT brackets, sources, prose sections; corrected national VAT and CIT headline (https://www.fsmlaw.org/fsm/code/title54/T54_Ch01_SubChpII_2014.html) Source

    • Income tax brackets updated

    Refreshed from FSM Code Title 54 and DoFA corporate-tax chapter; added PIT/GRT brackets, sources, prose sections; corrected national VAT and CIT headline (https://www.fsmlaw.org/fsm/code/title54/T54_Ch01_SubChpII_2014.html) Source

    • Income tax brackets updated

    Refreshed from FSM Code Title 54 and DoFA corporate-tax chapter; added PIT/GRT brackets, sources, prose sections; corrected national VAT and CIT headline (https://www.fsmlaw.org/fsm/code/title54/T54_Ch01_SubChpII_2014.html) Source

    • Income tax brackets updated

    Refreshed from FSM Code Title 54 and DoFA corporate-tax chapter; added PIT/GRT brackets, sources, prose sections; corrected national VAT and CIT headline (https://www.fsmlaw.org/fsm/code/title54/T54_Ch01_SubChpII_2014.html) Source

    • Income tax brackets updated

    Refreshed from FSM Code Title 54 and DoFA corporate-tax chapter; added PIT/GRT brackets, sources, prose sections; corrected national VAT and CIT headline (https://www.fsmlaw.org/fsm/code/title54/T54_Ch01_SubChpII_2014.html) Source

Related

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