The world's smallest island nation by area and one of the smallest sovereign states by population.
Nauru taxes business activity through the Business Tax Act 2016, which imposes Small Business Tax, Business Profits Tax, and Non-Resident Tax depending on entity type, residency status, and turnover, administered by the Nauru Revenue Office. International Business Companies registered under the International Companies Act 1992 pay 0% corporate tax on income earned outside Nauru, while resident companies with Nauru-source income are taxed under the graduated Business Profits Tax schedule described on this page.
A specific statutory tax year-end is not confirmed in available primary sources; confirm current filing deadlines directly with the Nauru Revenue Office (Department of Finance) before relying on this page.
25% (per Bloomberg Tax, cited via Tax Foundation's sourced compilation).
Under the Employment and Services Tax Act, a 20% flat rate applies on resident individuals' monthly employment or services income above AUD 9,240 (0% below that threshold); different thresholds apply for non-resident individuals (20% above AUD 20,000 annually, or a flat 30% for Regional Processing Centre-connected employment). Separately, Business Profits Tax gives Nauruan resident individuals, partnerships, and trusts a substantial AUD 250,000 tax-free threshold before the 20% rate applies to business income. This directly contradicts secondary sources (TaxAtlas, iCalculator) that incorrectly claim Nauru has no personal income tax at all - those claims are not relied on here, given the government's own published rate schedule confirms otherwise.
0% - Nauru has no VAT or GST system. Import duties, phosphate mining royalties, and fishing license fees are the primary revenue sources instead. A separate 15% Telecommunications Service Tax applies specifically to telecom service providers' gross revenue, but this is not a general consumption tax.
"Resident individual" and "resident person" are defined under the Employment and Services Tax Act 2014 and the Business Tax Act 2016, with a commonly cited practical threshold of more than 183 days present in a fiscal year (this day-count figure comes from a secondary source, not the Acts themselves, and should be confirmed against the statutes directly for precision). Acquiring Nauruan citizenship - including through the Economic and Climate Resilience Citizenship Program (ECRCP) - does not by itself create tax residency; the statutory tests still apply. Nauru taxes on a source basis: only Nauru-source income is taxed, regardless of the recipient's citizenship or residency status, and foreign-source income is not taxed.
Under the Business Tax Act's own rate schedule, a non-resident company conducting business in Nauru through a permanent establishment is taxed as Category D, at the standard 25% Business Profits Tax rate, the same rate that applies to resident companies with annual gross revenue above AUD 15,000,000 (Category B) and to resident companies controlled by a non-resident associate (Category C). This is confirmed directly from the Nauru Government Gazette's own published rate schedule.
No Controlled Foreign Company regime was identified in available sources for Nauru.
One source indicates thin capitalization standards (debt-to-asset ratio rules) are in effect in Nauru, but the specific ratio or mechanism is not confirmed in available primary sources - confirm directly with Nauru Revenue and Tax Office before relying on an assumption either way.
Nauru classifies entities under its own domestic Business Corporations Act and Business Tax Act rather than offering an elective check-the-box system, and no ATAD2-style anti-hybrid mismatch regime addressing double-deduction or deduction-without-inclusion outcomes has been identified, consistent with Nauru having no Controlled Foreign Company regime. Nauru International Business Companies are commonly used in cross-border structuring as disregarded or pass-through entities under a foreign owner's home-country check-the-box election, a classification choice made under the foreign owner's own law rather than Nauru's.
No domestic FBAR-equivalent regime requires Nauru residents to separately disclose foreign financial accounts. Nauru is a CRS participating jurisdiction, committed as an early adopter with first information exchange by 2018. Nauru's offshore banking sector was fully dismantled between 2003 and 2004 following FATF pressure, and a 2025 Asia/Pacific Group on Money Laundering report assessed Nauru as low-risk. US persons remain independently subject to FinCEN Form 114 (FBAR) and potentially Form 8938 regardless of Nauru's own rules.
No participation exemption regime for dividends or capital gains from a qualifying subsidiary was identified; Nauru does not impose a capital gains tax at all and does not tax distributed dividends, which functions differently from a dividend-specific participation exemption but achieves a broadly similar practical effect for most ordinary shareholding structures.
A specific statutory unilateral foreign tax credit mechanism is not confirmed in available primary sources. Nauru has signed the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters, an information-exchange instrument rather than a double-tax-relief mechanism, and Nauru has no comprehensive double taxation agreements in force, so relief from double taxation for Nauru residents with foreign-source income should not be assumed available through a treaty network.
Nauru has no comprehensive double taxation agreements, per TaxAtlas. It has signed the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters (an information-exchange instrument, not a bilateral tax treaty) and was previously listed as an uncooperative tax jurisdiction before making transparency commitments. One lower-quality source vaguely references unspecified "tax agreements with several nations" without naming any - this is not corroborated by the more specific TaxAtlas finding of zero DTAs and should not be relied on.