Palau Goods and Services Tax (PGST)

How to register

You can register for PGST by completing the relevant registration forms:

• New to business – Tax-001-Taxpayer-Registration-and-TIN-Application-Form
• Existing business – updating contact information form – Tax-001C-Taxpayer-Information-Update-Form  followed by completing Tax-001H-Tax-Category-Registration-Form

Use one of these options to lodge the forms:

• email the completed form to etaxregister@palaugov.org
• bring it to us at the BRT office

Bank account information will need to be submitted in person at the BRT office.

Compulsory registration

You are required to register for PGST if you meet any of the following:

• you have an average annual taxable supply of more than $300,000 (see PGST registration guide for more information)
• you hold a Foreign Investment Approval Certificate (FIAC), even if you are below the registration threshold amount
• you are one of the following State-owned enterprises:
  • Palau Public Utilities Corporation
  • Palau National Communications Corporation
  • Belau Submarine Cable Corporation.

See also:

• PGST registration threshold – calculating your taxable supply
• PGST – types of supplies

Exemptions

You are exempt from compulsory registration if you are:

• a person operating a public or private hospital
• a person operating a public or private medical clinic
• a not-for-profit education institution
• the Palau Community College
• a government entity of a type different to those listed under compulsory registration
• a non-profit corporation.

Voluntary registration

If you are not required to register for PGST, you can apply for voluntary registration if you meet the following requirements:

• you are making, or intend to make taxable supplies
• you conduct your business from a fixed location
• you have commenced conducting business, and:
  • you have kept proper records of your business operations
  • you have complied with your tax obligations
• you understand you will need to comply with your PGST reporting and record keeping obligations
• it is reasonably expected the annual value of taxable supplies made by the person will equal or exceed $50,000.

If you voluntarily register for PGST you can:

• claim back the PGST you pay on purchases, including capital items used to make taxable supplies
• claim back PGST you pay on business set-up costs.

Some businesses may prefer to purchase from PGST registered businesses, so they are able to claim back the PGST they pay.

See also

• Business Profit Tax (BPT) registration
• Next steps after registering

Record keeping requirements

Record keeping is essential and will help you to pay the correct amount of tax.

The purpose of record keeping is to ensure that you can explain how you worked out your PGST returns. Records are also important to explain your business profits tax transactions as well as keeping track of your business performance generally.

Record keeping requirements will help you understand:

• Records to keep for PGST
• Records to keep for BPT
• How long to keep your records
• How to keep, archive, and retrieve records
• Tips for good record keeping practices

Filing your PGST return

You will need to file a PGST return and pay any amounts owing on that return monthly. The PGST Return form will be available through the Tax Filing App v4.0.8, due on the 30^th day following the end of the PGST period.

Completing the PGST return

Use the information from your record keeping to complete all mandatory fields in the PGST return. This will include the PGST you charged and collected on behalf of the government (output tax credits), and the amount of PGST you paid on goods and services you are entitled to claim (input tax credits).

If the amount of PGST you collected on behalf of the government (output tax) is greater than the amount of PGST credits you are entitled to claim for purchases and expenses, then you have tax payable. You pay this amount to the BRT.

If the amount of PSGT credits you claim for purchases and expenses (input tax) is greater than the amount of PGST you collected on behalf of the government (output tax), then you receive a tax credit.

PGST credits

If your PGST filing results in a credit, you can claim it against the next two months’ PGST you have to pay. You can apply for a refund two months after the due date for the PGST period that resulted in the credit. Where your business has an ongoing entitlement to refunds, you may be able to apply to the Director to obtain an immediate refund.

You have up to 12 months to request a refund, starting from the due date for the PGST period that resulted in the credit.

Apply for a refund by completing the relevant form and filing with the BRT.

PGST does not impact Business Profits Tax (BPT)

When you are PGST registered, the gross revenue you report in BPT filing does not include:

• any output tax you receive (PGST you collect on behalf of the government) on taxable supplies you make
• any PGST refunds you receive when you file your PSGT return.

You cannot claim a deduction in your BPT filing for PSGT on any amounts that result in a credit in your PGST return.

See also

• PGST – types of supplies

Help and support

We understand you are still learning this new tax system. We are here to assist you with completing your return and understanding your tax obligation.

Don’t wait. Speak to us today, or visit palaugov.pw/taxreform for more information about the help and support we can provide

How to pay

Your payment can be made either in person or remotely.
In person payment

• file the completed PGST Return Form
• use the transmittal you received after filing with BRT proceed to pay at the Bureau of National Treasury office
• by the due date

Payment Options

• credit / debit card
• cash
• wire transfer / direct deposit (using ACH)
• check

Remote payment Options
To pay by wire transfer / direct deposit contact Chief Darla Babauta from the Bureau of National Treasury at (680) 767-2506/2748 or via emal to darlab@palaugov.org .
If paying by check, make it out to the Bureau of National Treasury and take it to their office, or you can post to P.O. Box 6069 Koror, Palau 96940. If you are posting, you will need to include your contact phone number on the check.