# Palau: taxes, residence and cost of living Source: https://domicile.wiki/places/palau/ (domicile.wiki, researched 2026-10-15). Data licence CC BY-SA 4.0. Research, not tax or legal advice. ## At a glance For an EU-citizen family of five living off a EUR 30M portfolio (the guide's default reader). - Score for a wealthy family: 68 / 100 - Tax on a €30M portfolio: €48,600 a year - Wealth tax: none - Children inherit: tax-free - EU member: no - Currency: USD - Capital: Ngerulmud ## Tax on investments, inheritance and wealth Palau has no general personal income tax: after the January 2023 tax reform (10% Palau Goods and Services Tax, Business Profits Tax, reformed Wages Tax) the Ministry of Finance states that the regime 'does not include a general personal income tax'. Investment income and capital gains of individuals are therefore untaxed as far as found. No inheritance, gift or wealth tax was found. - **Ordinary residence**: No general personal income tax; wages tax on employment income; business taxes on businesses. ## Inheritance law and trusts Palau's succession law was not sourced in this research. The Hague Trusts Convention is not in force. No forced heirship rule was confirmed. ## Daily life (0-100, higher is better) - Safety and personal security: 42 - Political and institutional stability: 64 - Legal system and property rights: 72 - Healthcare quality and access: 48 - Education quality: 54 - Human development and quality of life: 57 - Infrastructure and connectivity: 84 - Business opportunities and economy: 59 ## Research notes ### Palau — family-office tax dossier Last reviewed: 2026-10-15 Tax year: 2026 Reviewer: research agent (Claude), unreviewed by a tax adviser #### Summary Palau has no general personal income tax: after the January 2023 tax reform (10% Palau Goods and Services Tax, Business Profits Tax, reformed Wages Tax) the Ministry of Finance states that the regime 'does not include a general personal income tax'. Investment income and capital gains of individuals are therefore untaxed as far as found. No inheritance, gift or wealth tax was found. US citizens: US citizens remain subject to US federal income, estate and gift tax on worldwide income and assets wherever they live; the app adds the federal layer. Where local tax on portfolio income is nil there is nothing to credit against US tax. #### Residence and eligibility No personal income tax on investment income, so no relevant tax residence test. Palau's 'digital residency' card is an ID product, not tax or immigration residence. - **Residence/entry permit** (EU, US, OTHER): Not researched. #### Capital gains ##### Standard regime No tax on individuals' capital gains (no general personal income tax). - **Important exceptions, statute references and announced changes:** A second phase of tax reform could introduce a personal income tax (announced as possible, nothing enacted found). - **Tax year / confidence / verification:** 2026 / medium / partially_verified (checked 2026-10-15) - **JSON numbers:** headline 0% (0.0); listed domestic 0% (0.0); listed foreign 0% (0.0); private business sale 0% (0.0); local real estate 0% (0.0); foreign real estate 0% (0.0). - **How derived:** Ministry of Finance FY2024 Economic and Fiscal Update: 'the current reformed regime does not include a general personal income tax, which would form a second phase of the reforms'. - **Trader recharacterisation:** A trading business would fall under Business Profits Tax / gross receipts tax (rates not verified). #### Dividends ##### Standard regime No tax on individuals' dividends (no general personal income tax). - **Tax year / confidence / verification:** 2026 / medium / partially_verified (checked 2026-10-15) - **JSON numbers:** headline 0% (0.0); domestic 0% (0.0); foreign gross 0% (0.0); foreign tax relief: not_applicable. - **How derived:** No general personal income tax (FY2024 Economic and Fiscal Update). Foreign withholding (e.g. US 30%) is a final cost. - **Treaty network:** No comprehensive treaties found (not verified). Palau uses the US dollar under its Compact of Free Association. #### Inheritance and gifts to children ##### Standard regime No inheritance, estate or gift tax found among Palau's taxes (PGST, excises, business profits tax, gross receipts tax, wages tax, room tax). - **Tax year / confidence / verification:** 2026 / low / unverified (checked 2026-10-15) - **JSON numbers:** basis none; children fully_exempt; exemption 0; brackets []; other transfer costs 0.0. - **Gift tax:** No gift tax found. #### Wealth tax ##### Standard regime No net wealth tax and no recurring levy on financial assets. - **Tax year / confidence / verification:** 2026 / medium / partially_verified (checked 2026-10-15) - **JSON:** type none. - **Property tax (not a wealth tax):** Not researched. #### Special regimes None found for wealthy new residents. #### Company taxation (kept separate from personal tax) Headline rate in JSON: null (unknown). Business Profits Tax for larger businesses introduced in January 2023, medium businesses stay on the Business Gross Receipts Tax and small ones pay an annual fee (FY2024 Update); rates not verified. #### Cost of living notes Not sourced. #### Open questions - Palau legislation not read; confidence rests on the Ministry of Finance's description. - [standard/capital_gains] Primary legislation (RPPL 11-11 and the Palau National Code Title 40) not read. - [standard/inheritance] Foreigners cannot own land in Palau (general knowledge, not verified). #### Sources - Economic and Fiscal Update FY2024 (tax reform section): https://www.palaugov.pw/wp-content/uploads/Economic-Fiscal-Update-FY2024.pdf - Ministry of Finance (Bureau of Revenue and Taxation): https://www.palaugov.pw/executive-branch/ministries/finance/ #### Change log - 2026-10-15: initial research. ## Residence and succession sources - [HCCH status table, Convention of 1 July 1985 on the Law Applicable to Trusts](https://www.hcch.net/en/instruments/conventions/status-table/?cid=59) — HCCH