Tax laws Micronesia
The Federated States of Micronesia (FSM) operates a tax system comprising national and state-level taxes. At the national level, the government imposes three primary taxes, administered by the Customs & Tax Administration (CTA):
1. Import Tax:
Description: A tax levied on goods imported into the FSM.
Collection: Imported items are held by customs officials until all import taxes are paid.
2. Gross Revenue Tax:
Description: Assessed on the gross revenues of businesses operating within the FSM.
Calculation: Based on gross receipts, with limited deductions allowed.
Scope: Applicable to nearly all individuals or companies earning income from activities within the FSM, excluding employees.
3. Wages and Salaries Tax:
Description: Employers are required to withhold tax from wages and salaries paid to employees.
Calculation: Based on gross wages and salaries, without deductions.
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State-Level Taxes:
In addition to national taxes, FSM states may impose their own taxes, such as sales taxes. For example, a sales tax attaches to goods upon their first sale in the state, with the seller responsible for payment within 120 days of arrival. citeturn0search7
Recent Legal Developments:
In July 2023, a referendum approved nine amendments to the FSM Constitution, including revisions affecting revenue sharing of tax incomes between national and state governments, particularly concerning fishing license revenues. citeturn0search10
Note: Tax laws are subject to change. For the most current information, consult official FSM tax authorities or seek professional tax advice.
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