Europe

Vatican City

Corporate rate
0%
Top personal rate
0%
VAT / GST rate
0%
One-sentence summary Vatican City's corporate tax position: No conventional corporate income tax; the Vatican's economic activity (museums, publishing, philanthropy, investments) is organized through ecclesiastical and institutional bodies outside standard corporate tax rules. Personal income tax: No personal income tax on residents, clergy, or Vatican employees; Italian tax residents who work at the Vatican remain subject to Italian tax on their worldwide income under the bilateral arrangement with Italy. VAT/consumption tax: No VAT; goods purchased within Vatican City are duty-free and the state operates outside EU VAT jurisdiction.

Corporate Tax Rate

No conventional corporate income tax; the Vatican's economic activity (museums, publishing, philanthropy, investments) is organized through ecclesiastical and institutional bodies outside standard corporate tax rules.

Personal Tax Rate

No personal income tax on residents, clergy, or Vatican employees; Italian tax residents who work at the Vatican remain subject to Italian tax on their worldwide income under the bilateral arrangement with Italy.

VAT / GST Rate

No VAT; goods purchased within Vatican City are duty-free and the state operates outside EU VAT jurisdiction.

Residency

Vatican City has essentially no resident population in the conventional sense - the roughly 800-900 people with Vatican citizenship or residency (clergy, Swiss Guard, officials) are not subject to any Vatican income tax regardless of role, earnings, or length of residence, confirmed via multiple independent sources. Residency has no meaningful tax consequence given the complete absence of a taxation system. Note the important separate point below regarding Italian tax residents.

CFC (Controlled Foreign Company) Rules: Not applicable

No CFC regime exists or would have practical purpose, given Vatican City imposes no corporate income tax on which a CFC regime could operate. This does not mean a Vatican-linked entity is immune from a foreign owner's own home-country CFC rules.

Thin Capitalization

Not applicable - no corporate income tax exists against which an interest-deductibility limit would operate.

Foreign Bank Account / Foreign Financial Asset Reporting

No domestic FBAR/Form 8938-equivalent exists. Separately and independently of Vatican law, US citizens and Green Card holders with financial interests connected to Vatican-linked institutions (including the Institute for the Works of Religion, commonly called the "Vatican Bank") remain obligated to file FinCEN Form 114 (FBAR) once aggregate foreign accounts exceed USD 10,000, and potentially Form 8938 - this is a US-law obligation independent of anything Vatican City itself requires. Note that Italian nationals and Italian tax residents working for the Holy See or Vatican City State must generally comply with Italian tax law on their worldwide income, per a specialist source - Vatican employment itself does not exempt an otherwise-Italian-tax-resident individual from Italian obligations, and a 2018 European Court of Justice ruling confirmed Italy can recover certain unpaid property taxes from Vatican-linked entities for specific periods, illustrating the practical limits of the Vatican's tax-exempt status when it intersects with Italian and EU law.

Treaty Network

Vatican City has no meaningful double tax treaty network, consistent with having no domestic tax system for a treaty to provide relief against. Goods purchased within Vatican City are duty-free, and the Vatican operates outside EU VAT jurisdiction despite being geographically within Rome.

Sources: TaxRavens - Vatican City Tax System 2026, Confidus Solutions - Economy of the Vatican, International Trade Council - Doing Business with Vatican City, Chandrawat and Partners - Doing Business in the Vatican. Page last verified: August 08, 2026. General information only - confirm current rates with a licensed advisor in this jurisdiction before relying on this page.