Tax rate by region Palau

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Palau administers a 10% Goods and Services Tax (GST) through its Bureau of Revenue & Taxation (BRT), which covers digital products and electronic services. Non-resident digital service suppliers are subject to a mandatory registration threshold of USD 300,000 in annual sales to Palauan customers, below which B2B transactions are managed via a reverse charge mechanism. Taxpayers must navigate a monthly compliance cycle, with electronic returns and payments due to the BRT by the 30th day of the month following the close of the reporting period.

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Palau

Palau applies a Goods and Services Tax (GST) at 10% on digital products and services. The Bureau of Revenue & Taxation (BRT), under Palau’s Ministry of Finance, administers GST. Non-resident businesses must register once sales reach USD 300,000 to Palauan customers. 

Official government link: Bureau of Revenue & Taxation (BRT)

10.00%

E-products and services VAT/Sales tax rate

Exempted product categories

Certain financial services, government services

Tax applicable for

B2B and B2C

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

After USD 300,000 in sales

Online registration possible

Yes 

Local representative needed

Not mandatory 

Registration procedure

Register with Bureau of Revenue & Taxation (BRT), Ministry of Finance, Palau

List of digital and electronic services liable for tax

Streaming games, music, apps, films, e-books, e-journals, software, internet services

Penalties

Penalties and interest apply for late registration and for non-compliance with filing requirements (BRT)

Registration threshold

USD 300.000

Filing interval

Monthly

Filing deadline

By the 28th day of the month following the taxable period

E-invoicing requirements

Not mandatory 

Record keeping

3 years 

How-To Guides: Palau SaaS VAT

Step: 1 Threshold

Palau Goods and Services Tax Act enacted under the Tax Reform Act of 2022, effective January 1, 2023. Effective January 1, 2023, Palau implemented a 10 percent goods and services tax (PGST), which includes measures to impose tax on the provision of remote services to consumers in Palau. Nonresidents are required to register if their sales exceed the registration threshold of $300,000.

 

Registration is mandatory if annual taxable supplies exceed this. Voluntary registration is available for businesses between $50k and $300k.

Step: 2 Business Registration

Register with the Bureau of Revenue and Taxation (BRT). Foreign entities must complete Form Tax-001 (Taxpayer Registration) and Tax-001H (Tax Category Registration).

Step: 3 TIN/VAT Number

TIN (Taxpayer Identification Number) is issued by the Ministry of Finance.

Step: 1 Standard Rate

Th standard rate in Palau is 10% (Standard PGST rate).

 

Step: 2 Rate Formula

To calculate your tax amounts, use the following formula:

 

Tax Amount = Net Price x 10%. 

Step: 3 Reverse Charge (B2B)

A reverse charge mechanism may apply in certain B2B cases; however, Palau primarily expects registered suppliers to collect PGST directly.

Step: 1 Selling B2C

Non-resident providers must charge 10% PGST at the point of sale to private individuals if the seller is registered (mandatory above the threshold).

Step: 2 Selling B2B

Tax is not charged if the buyer provides a valid Palau TIN. The invoice should state “Reverse Charge” and the buyer’s TIN.

Step: 3 Invoice Requirements

Must include:
– Supplier Name/Address
– Supplier TIN
– Sequential Invoice Number
– Date of Supply
– Description of Services
– Price (PGST-inclusive or with tax shown separately)
– Buyer Name/TIN (mandatory for B2B/Reverse Charge).

Step: 1 Filing Interval

Taxes are filed monthly (standard for PGST registered entities).

Step: 2 Filing Deadline

Returns must be filed and payment made by the 28th day of the month following the taxable period.

Step: 3 Submission

File via the Palau Tax Online portal or via email to [email protected]. Payments can be made via wire transfer or authorized local banks.

Step: 4 Record Keeping

Records and invoices must be maintained for minimum of 3 years in chronological order; records must be accessible in English.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Palau’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

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