10% standard flat rate (30% for oil and gas contractors; 6% for oil and gas subcontractors); Supplemental Petroleum Tax also applies to oil and gas contractors.
Progressive 0% to 10% for residents on worldwide income; flat 10% for non-residents on Timor-Leste-source income (including Wage Income Tax withholding).
No VAT; a limited sales tax applies at 2.5% on imported taxable goods and 0% on goods/services sold and delivered domestically.
An individual is resident if present in Timor-Leste for more than 183 days in a 12-month period, confirmed via a specialist payroll-compliance source. Residents are taxed on worldwide income (both Timor-Leste and foreign-sourced), with a foreign tax credit available where foreign-source income was taxed at source, confirmed directly via PwC. Non-residents are generally taxed on Timor-Leste-source income attributed to a permanent establishment; non-residents without a PE may instead face a 10% withholding tax.
Confirmed directly via PwC Worldwide Tax Summaries: "Timor-Leste does not have any CFC regulations." Specifically, with regard to profits retained in controlled foreign companies, PwC confirms "Timor-Leste does not currently have any arrangements to otherwise deem the repatriation of the profit" - meaning undistributed foreign-entity profits are not attributed back to Timor-Leste residents under current law.
Confirmed directly via PwC: "there are no 'thin capitalisation' or similar rules in Timor-Leste." Instead, a much stricter blanket rule applies: interest is generally not deductible at all for corporate tax purposes, except for financial institutions specifically, confirmed via the same source - a simpler but more restrictive approach than a debt-to-equity ratio test.
No domestic FBAR/Form 8938-equivalent requiring Timor-Leste residents to self-report their own foreign accounts was identified. Timor-Leste's participation in the OECD Common Reporting Standard (CRS) for automatic exchange of financial account information has not been confirmed through available sources, confirmed via a specialist investment-guide source - a genuine, explicitly-acknowledged gap rather than an assumed "No." Separately and independently of local law, US citizens and Green Card holders with Timor-Leste 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.
Timor-Leste has entered into a double taxation treaty with only one country, Portugal, confirmed directly and consistently via PwC and two independent specialist sources. Distinctively, additional treaty-like relief specific to the petroleum sector is separately embedded in the Timor Sea Treaty (TST), a bilateral petroleum-resource-sharing arrangement rather than a conventional income tax treaty, confirmed directly via PwC - relevant given Timor-Leste's oil and gas sector faces a materially different 30% CIT rate (versus the general 10% rate) plus a separate Supplemental Petroleum Tax.