Independent Pacific island nation and Commonwealth realm.
The Solomon Islands taxes resident companies (companies incorporated in the Solomon Islands) on worldwide income at a flat 30% rate, with non-resident companies subject to a 35% rate, administered under the Income Tax Act (Cap. 123) by the Inland Revenue Division. To prevent double taxation of corporate profits, a deduction is allowed for dividends paid where dividend withholding tax has been correctly deducted and remitted (20% for resident recipients, 30% for non-resident or non-corporate resident recipients).
The tax year is the calendar year, with a provisional payment system applying to companies and businesses throughout the year based on estimated income.
30% standard rate.
Progressive. Employment income is subject to PAYE withholding.
The Solomon Islands does not have a VAT or GST system. Instead, a goods tax is levied on imported goods and selected domestically manufactured goods at various rates, alongside separate import duties (four ad valorem rates of 20%, 15%, 10%, and 5% on most imported goods, with exemptions for government, diplomatic, and certain charitable/educational imports).
Per the Solomon Islands Inland Revenue Division's own guidance, an individual is resident for tax purposes if they reside, or intend to reside, in the Solomon Islands for longer than 6 months. A secondary source frames this as a 183-day-or-more test within any 12-month period, which is broadly consistent with the official 6-month framing but adds an intent element the official source emphasizes and the secondary source does not - use the official IRD framing (reside or intend to reside beyond 6 months) as authoritative. Companies incorporated in the Solomon Islands are residents. Residents are taxed on worldwide income; non-residents on Solomon Islands-source income only.
A foreign company operating through a branch or permanent establishment in the Solomon Islands is subject to corporate income tax on its Solomon Islands-sourced income, with specific rules applying to the calculation of taxable profits for branches; payments made by Solomon Islands entities to non-residents for services, royalties, interest, or dividends may be subject to withholding tax at rates from 5% to 30% depending on the payment type and recipient status, unless reduced by an applicable double tax agreement.
There is no provision attributing the undistributed profits of a foreign-controlled subsidiary to a Solomon Islands resident shareholder. The Act instead relies on two narrower anti-abuse mechanisms aimed at protecting the domestic tax base rather than reaching into foreign subsidiaries. Section 21(2) recomputes the profits of a Solomon Islands resident doing business with a closely-connected non-resident on an arm's-length basis where the arrangement produces less than ordinary profit for the resident. Section 25 is a general anti-avoidance rule voiding any arrangement, direct or indirect, whose purpose or effect is tax avoidance, with the Commissioner empowered to reconstruct the taxpayer's income as if the arrangement had not been made. Neither functions as a CFC regime.
Interest paid on debt, including inter-company loans, is disallowed as a deduction to the extent the ratio of loan capital to paid-up equity exceeds the ratio that would apply to an arm's-length, competitive third-party transaction at the time the loan was made, as determined by the Commissioner. This is a facts-and-circumstances arm's-length test rather than a fixed statutory debt-to-equity safe-harbor ratio (there is no numeric ratio such as 2:1 or 3:1 specified in the Act itself), so the applicable limit is determined case by case by the Commissioner.
The Solomon Islands classifies entities under its own domestic Income 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. As described elsewhere on this page, the Solomon Islands has no CFC regime and instead relies on Section 21(2) (arm's-length recomputation for related-party transactions producing less-than-ordinary profit) and Section 25 (general anti-avoidance rule) as its primary anti-avoidance backstop.
No domestic FBAR-equivalent regime requires Solomon Islands residents to separately disclose foreign financial accounts, and the Solomon Islands is not currently a CRS participating jurisdiction, so it does not automatically exchange financial account information with foreign tax authorities under the OECD's Common Reporting Standard. US persons remain independently subject to FinCEN Form 114 (FBAR) and potentially Form 8938 regardless of the Solomon Islands' own rules.
A deduction is allowed against a company's taxable income for dividends paid where dividend withholding tax has been correctly deducted and remitted, preventing a second layer of corporate-level taxation on distributed profits; a distinct exemption for dividends or capital gains from a qualifying foreign subsidiary is not confirmed in available primary sources, and the Solomon Islands has no capital gains tax at all, which achieves a related but different practical effect for share disposals.
A Solomon Islands tax resident who receives foreign dividend income subject to foreign withholding tax may claim a tax credit on their Solomon Islands tax return for the foreign tax paid, up to the amount of Solomon Islands tax otherwise payable on that dividend income; the Solomon Islands' limited double tax agreement network (confirmed to include at least a treaty with the United Kingdom) provides additional treaty-based relief for income connecting the two countries.
The Solomon Islands has entered into a limited number of double taxation agreements; the ICAEW library confirms at least a UK-Solomon Islands double tax treaty exists, but a comprehensive named-partner list is not located in available sources.