What is the Palau goods and Services Tax Act (PGST)?

“Act” is defined to mean the Palau Goods and Services Tax Act in Chapter 12 of Title 40. The Act imposes Palau Goods and Services Tax (PGST) on: (i) taxable supplies made by a registered person; (ii) supplies of imported services made to a registered person; and (iii) taxable imports by any person.

What is PGST tax in Palau?

It is a broad-based tax of 10%, applied to most goods and services and other items sold or consumed in Palau. Some things don’t have PGST included, these are called Exempt supplies. Businesses registered for PGST charge PGST on their sales and collect on behalf of the government.

What is the tax system in Palau?

Palau employs a progressive income tax system. As of 2025, the tax rates are as follows: These rates apply to both residents and non-residents. Summary: If you want to have a better understanding of the taxes you should pay on personal income in Palau, you can use the personal tax calculator in the Taxation section of the Palau page.

What is PGST in Palau?

Proposed Comprehensive Tax Reform (Palauan) Palau Goods and Services Tax (or PGST) was introduced on January 1 2023. It is a broad-based tax of 10%, applied to most goods and services and other items sold or consumed in Palau. Some things don’t have PGST included, these are called Exempt supplies.

Are prohibited imports allowed in Palau?

Prohibited imports shall not be transported, stored, or released for use in Palau except as provided for in the laws under which their import is prohibited or restricted. 4.5.1.1 General Penalty.

How is investment income taxed in Palau?

Investment income in Palau is generally subject to the same progressive tax rates as other forms of income. This applies to most forms of investment income, including: Summary: Capital gains in Palau are generally treated as ordinary income and taxed at the standard progressive rates.