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Business Profits Tax (BPT)

A 12% tax assessed and levied on the net income of the person for each tax year at the same rate as the highest rate of tax on salaries and wages.

Who will pay BPT?

BPT is imposed on every PGST registered person including commercial banks. Broadly, this includes:

    • A person who has turnover of over $300,000 per annum (averaging rules etc. apply)
    • Any person who holds a Foreign Investment Approval Certificate
    • Any person who voluntarily chooses to be registered for PGST (rules apply)
    • The following Government entities
      • Palau Public Utilities Corporation;
      • Palau National Communications Corporation; and
      • Belau Submarine Cable Corporation.

How is BPT paid?

BPT is paid in advance by installment that must be paid by the 15th day of each month following the end of the 3rd, 6th, 9th and 12th months of the taxpayer’s tax year.

An annual return for a tax year must be filed within 3 months of the tax year.

Note: Tax year” means:

    • for a company, the period of twelve (12) months ending on the date of the annual balance of the company’s financial accounts; or
    • for any other taxpayer, the calendar