- 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
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
Income tax brackets
Corporate
| Bracket min | Bracket max | Rate |
|---|---|---|
| USD 10,000 | and above | 3.0% |
Personal income
| Bracket min | Bracket max | Rate |
|---|---|---|
| USD 0 | USD 11,000 | 6.0% |
| USD 11,001 | and above | 10.0% |
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)
Sources
- FSM Code — wage and salary tax (§121) (accessed Oct 9, 2026) 6% on first USD 11,000 of wages; 10% above; USD 1,000 deduction for employees with gross wages under USD 5,000 (§122)
- FSM Code — gross revenue tax (§141) (accessed Oct 9, 2026) USD 80 on first USD 10,000 of taxable gross revenue; 3% on excess; exemption under USD 2,000 revenue
- FSM Code — corporate income tax for major corporations (§321) (accessed Oct 9, 2026) 21% on taxable income of qualifying FSM-incorporated major corporations; GRT exemption when income tax remitted
- DoFA — Department of Finance and Administration (accessed Oct 9, 2026) National Customs & Tax Administration; import duties; state sales taxes administered separately
Change history
-
-
- 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
-
- 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
-
- 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
-
- 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
-
- 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
-
- 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
-
- 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
-
- 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
-
- 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