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Samoa

Country Name: Samoa
Currency: Samoan Tala (WST)
Primary Tax Authority: Ministry for Customs and Revenue
Key Legislation:

  • Income Tax Act
  • Goods and Services Tax Act
  • Customs Act
  • Corporate Tax Act

Fiscal Authority Allocation

Centralized Fiscal System:
Samoa operates a centralized tax system, with the Ministry for Customs and Revenue responsible for administering and collecting taxes, including corporate income tax (CIT), personal income tax (PIT), and goods and services tax (GST). Local governments have no taxing authority.

Corporate Income Tax (CIT)

Standard Rate: 27%
Samoa imposes a corporate income tax rate of 27% on the net taxable income of resident companies. Non-resident companies are taxed on their Samoan-sourced income.

Corporate Forms and Taxation:

  1. Corporation (Company): The most common corporate form, subject to the 27% CIT rate.
  2. International Company (IC): International companies, primarily focused on offshore activities, may benefit from tax exemptions on foreign-sourced income.
  3. Branches of Foreign Companies: Taxed at the same 27% CIT rate on Samoan-sourced income.

Exemptions and Incentives:

  • Tax Holidays: Companies in key sectors such as agriculture, tourism, and manufacturing may qualify for tax holidays, typically for a period of five to ten years.
  • Investment Incentives: The government offers tax exemptions for companies that invest in key sectors, including tourism, renewable energy, and infrastructure.

Goods and Services Tax (GST)

Standard Rate: 15%
Samoa applies a GST rate of 15% on most goods and services. GST is levied on the sale of goods, provision of services, and imports.

Exemptions:
Basic food items, educational services, healthcare services, and certain financial services are exempt from GST. Exports are zero-rated, allowing businesses to reclaim GST paid on inputs used to produce goods for export.

Personal Income Tax (PIT)

Progressive Rates:
Samoa applies progressive personal income tax rates as follows:

  • Up to WST 12,000: 0%
  • WST 12,001 to WST 30,000: 20%
  • Above WST 30,000: 27%

Dividends:
Dividends paid to residents are exempt from withholding tax, while dividends paid to non-residents are subject to a 15% withholding tax.

Additional Mandatory Contributions

National Provident Fund Contributions:
Employers and employees are required to contribute to the Samoa National Provident Fund (SNPF), which provides pensions and other social security benefits.

  • Employer Contribution: 10% of gross salary.
  • Employee Contribution: 10% of gross salary.

Withholding Taxes

  • Dividends: 15% for non-residents (exempt for residents).
  • Interest: 15%
  • Royalties: 15%
    Withholding tax rates may be reduced under Samoa’s double taxation agreements (DTAs).

Transfer Pricing Rules

Samoa does not have formal transfer pricing legislation. However, companies engaging in cross-border related-party transactions are expected to follow the arm’s-length principle, consistent with international standards.

Special Tax Regimes

  • International Companies (ICs): ICs that conduct business outside Samoa are exempt from taxes on foreign-sourced income. This regime makes Samoa attractive for offshore financial services, particularly for holding companies and international business activities.
  • Tourism Incentives: Businesses in the tourism sector may qualify for tax holidays, import duty exemptions, and reduced GST rates on tourism-related services.
  • Renewable Energy: Samoa offers tax incentives for investments in renewable energy projects, including tax holidays and exemptions from import duties and GST on renewable energy equipment.

Other Taxes

  • Property Tax: Samoa imposes property taxes based on the value of the land and buildings, with rates varying depending on the location and use of the property.
  • Customs Duties: Import duties are levied on goods brought into the country, with rates generally ranging from 0% to 35%, depending on the type of goods.
  • Excise Taxes: Excise duties are applied to specific goods such as alcohol, tobacco, and fuel.

Double Taxation Agreements (DTAs)

Samoa has signed several double taxation agreements (DTAs) with countries such as New Zealand and Australia. These agreements help reduce withholding taxes on dividends, interest, and royalties and prevent the double taxation of cross-border income.

Local Taxes

Local governments do not collect taxes in Samoa. All revenue collection, including income tax, GST, and customs duties, is managed by the central government through the Ministry for Customs and Revenue.

Compliance and Reporting

Annual Filing:
Corporate tax returns must be filed by March 31st of the following year. Personal income tax returns are also due by the same date. The tax year in Samoa follows the calendar year.

Penalties for Late Filing:
Penalties for non-compliance or late filing include interest on overdue taxes and fines. Interest on unpaid taxes is generally set at 1% per month, with additional penalties for significant delays.

Recent Developments

Economic Diversification Efforts:
Samoa is working to diversify its economy by promoting investment in tourism, agriculture, and renewable energy. The government has introduced various tax incentives to encourage foreign direct investment (FDI) and local entrepreneurship in these sectors.

Sustainability and Climate Resilience:
Samoa is actively investing in renewable energy projects to reduce reliance on imported fossil fuels and improve climate resilience. The government offers tax incentives for renewable energy infrastructure and has set a goal of achieving 100% renewable energy by 2030.

Tourism Development:
Tourism continues to be a key driver of economic growth in Samoa, with the government offering attractive tax incentives to hotel operators, tour companies, and developers of tourism infrastructure. These incentives include tax holidays, reduced GST rates, and import duty exemptions.

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