Middle East

Palestine

Corporate rate
15%
Top personal rate
15%
VAT / GST rate
16%
One-sentence summary Palestine's headline corporate income tax rate is 15 (20% telecom/monopoly), the personal income tax rate is 15, and the standard VAT/GST rate is 16.

Corporate Tax Rate

Palestine's headline corporate income tax (CIT) rate is 15 (20% telecom/monopoly).

Personal Tax Rate

The headline personal income tax (PIT) rate is 15.

VAT / GST Rate

The standard VAT/GST (or equivalent consumption tax) rate is 16. Registration thresholds, zero-rated and exempt categories, and reduced rates vary - see the source link below for full detail.

Residency

Confirmed directly via PwC: individual residency uses a distinctive dual, nationality-based day-count test under the governing Income Tax Law No. 8 of 2011 - a Palestinian individual is resident if they have resided and maintained principal business activities in Palestine for 120 days during the year, while a non-Palestinian individual requires 183 days. Both residents and non-residents are taxed only on Palestine-source income (a territorial system for individuals). A corporation is resident if incorporated in Palestine or managed and controlled in Palestine; both resident and non-resident entities are taxed on their local taxable income.

Distinctive structural feature - the Paris Protocol tax clearance system: confirmed via a detailed taxation-history source, Israel collects taxes on behalf of the Palestinian Authority under a tax clearance arrangement and transfers them monthly - this typically accounts for roughly 70-75% of the PA's total revenue, making it the PA's single largest income source. Israel has on occasion withheld these transfers. Under the Paris Protocol, the PA has no jurisdiction in Area C of the West Bank; income taxes paid there by Israeli settlers and soldiers flow directly to the Israeli treasury rather than to the PA, while income taxes of Palestinian workers employed within settlements are collected by Israel and remitted to the PA without deduction. This is a genuinely distinctive administrative structure not found elsewhere on this site - Palestinian taxation is not simply administered by a single unified domestic authority collecting its own revenue.

CFC (Controlled Foreign Company) Rules: Not identified

No Controlled Foreign Company regime was identified in available sources this session. This is a genuine gap rather than a confirmed absence.

Thin Capitalization

No statutory thin capitalization ratio was identified in available sources this session.

Foreign Bank Account / Foreign Financial Asset Reporting

No domestic FBAR/Form 8938-equivalent requiring Palestine residents to self-report their own foreign accounts was identified. Institutional-level CRS/FATCA participation status was not independently confirmed this session, and Palestine's disputed statehood and the Paris Protocol financial arrangement with Israel (see Residency above) likely affect the practical mechanics of any international tax information exchange relative to a fully sovereign state. Separately and independently of local law, US citizens and Green Card holders with Palestine-connected financial accounts remain obligated to file FinCEN Form 114 (FBAR) once aggregate foreign accounts exceed USD 10,000, and potentially Form 8938, regardless of local requirements.

Treaty Network

No comprehensive double tax treaty network was identified in available sources this session. Most imports from the European Union and from Turkey (via the Turkey-Israel free trade agreement) receive zero customs duty treatment, confirmed via PwC, though this is a customs/trade arrangement rather than an income tax treaty.

Sources: PwC Worldwide Tax Summaries - Palestinian Territories, Corporate Income Tax, Taxrates.cc - Palestine Tax Rates (residency detail), PwC Worldwide Tax Summaries - Palestinian Territories, Other Taxes (customs detail), Wikipedia - Taxation in Palestine (Paris Protocol clearance system, Area C detail). Rates last reviewed by PwC: 09 February 2026. Page last verified: August 08, 2026. General information only - confirm current rates with a licensed advisor in this jurisdiction before relying on this page.