Marshall Islands

{"ftc_utility":"low","fbar_trigger_notes":"US persons maintaining bank accounts at local institutions such as Bank of Marshall Islands (BOMI) or other local banks must report those accounts if aggregate balances exceed $10,000 at any point during the year. Local banking infrastructure is limited; many expats use US accounts or regional Pacific banks. FBAR filing is required regardless of local tax status.","ftc_utility_reason":"The Marshall Islands imposes a Wages and Salaries Tax of 8-12% on locally earned employment income. A US expat earning wages locally can claim the FEIE to exclude up to the annual exclusion amount, reducing US tax liability. If income exceeds the FEIE cap, FTC on local taxes paid (at 8-12%) can offset residual US liability, but the relatively low local rate and common use of FEIE makes FTC utility low for most expats.","presence_day_count_notes":"US citizens and nationals can enter the Marshall Islands under the Compact of Free Association without a visa and may reside and work without restriction. There are no entry or stay limitations that would complicate reaching the 330-day threshold. The absence of a visa system for Americans simplifies physical presence tracking.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":16800,"local_tax_rate_on_earned_income":0.12,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Foreign-source pension income is outside the scope of the Marshall Islands Wages and Salaries Tax, which targets domestically sourced employment compensation. Foreign pension income received by a resident is not taxed locally.","tax_rate":null,"locally_taxed":false},"social_security":{"notes":"US Social Security benefits received by a US expat in the Marshall Islands are not subject to Marshall Islands tax. The Compact of Free Association between the US and RMI does not create an income tax treaty, and no separate tax treaty exists. US Social Security remains subject to US federal taxation under standard IRS rules, including the foreign income exclusion rules, but is not taxed by the RMI.","locally_taxed":false,"treaty_protection":false},"roth_distributions":{"notes":"Roth IRA distributions are not wages or salaries under Marshall Islands tax law and would not be subject to local taxation. No specific statutory guidance addresses Roth distributions, but the general exclusion of passive and foreign-source income from the local tax base is the applicable framework.","locally_taxed":false},"us_401k_ira_distributions":{"notes":"The Marshall Islands and the United States do not have a bilateral income tax treaty. However, because the Marshall Islands Wages and Salaries Tax applies only to locally sourced employment income, US retirement distributions (401k, IRA) received by a US expat residing in the Marshall Islands are generally not subject to local tax. No treaty protection exists, but the narrow scope of local tax effectively excludes such income.","tax_rate":null,"locally_taxed":false,"treaty_protection":false}}

{"rate":0.12,"notes":"The Marshall Islands has no separate capital gains tax. Gains are treated as ordinary income and subject to the standard wage and salary tax rates, with a top rate of 12%.","details":{"tax_type":"Capital Gains Tax","country_name":"Marshall Islands","country_iso_code":"MHL","source_references":["Marshall Islands Revised Code Title 36 - Revenue and Taxation","IMF Fiscal Affairs Department country notes","Pacific Financial Technical Assistance Centre (PFTAC) documentation"],"last_verified_date":"2026-06-03","general_description":"No standalone capital gains tax exists. Capital gains are folded into ordinary income and taxed at progressive rates under the Wages and Salaries Tax framework. The effective top rate is 12%.","corporate_capital_gains":{"rate":0.03,"notes":"No separate corporate capital gains rate. Gains included in gross revenue subject to 3% gross revenue tax for most business types.","tax_treatment":"Corporations in the Marshall Islands are subject to a gross revenue tax rather than a net income or capital gains tax. The gross revenue tax applies at 3% on most business receipts. Capital gains are generally included in gross revenue."},"individual_capital_gains":{"rate":0.12,"notes":"Passive investment income and capital gains are not separately categorized under current Marshall Islands tax law. Most individual-level taxation focuses on wages and salaries.","tax_treatment":"No separate capital gains tax. Individual gains are taxed as ordinary income under the Wages and Salaries Tax at progressive rates of 8% on the first $10,000 and 12% above that threshold."}}}

{"notes":"The Marshall Islands does not impose a separate dividend withholding tax on payments to non-residents. The country has a territorial-leaning tax system with no comprehensive income tax covering passive investment income. Dividends paid by Marshall Islands entities to foreign recipients are generally not subject to local withholding.","rates":[{"rate":0,"type":"withholding","notes":"No dividend withholding tax applied to payments to non-residents. Marshall Islands is commonly used as a flag-of-convenience and offshore incorporation jurisdiction with minimal tax on passive distributions."}]}