Timor-Leste

{"ftc_utility":"low","fbar_trigger_notes":"US expats with local bank accounts in Timor-Leste (primarily BNU, Mandiri, ANZ branches) must file FBAR if aggregate foreign account balances exceed $10,000 at any point during the year. Most working expats will exceed this threshold. FATCA compliance by Timor-Leste banks is limited.","ftc_utility_reason":"Timor-Leste applies a flat 10% income tax rate, far below US marginal rates. Foreign Tax Credits generated are correspondingly small. Most US expats will find the FEIE more beneficial than the FTC for earned income. FTC may provide some shelter for high earners whose income exceeds the FEIE limit.","presence_day_count_notes":"Timor-Leste does not impose strict visa duration limits that would disrupt the 330-day physical presence count for most working expats. A 30-day visa on arrival is standard, with extensions available. Long-term residents typically hold work visas or residency permits. Days in Timor-Leste count toward the 330-day threshold regardless of visa type.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":18000,"local_tax_rate_on_earned_income":0.1,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Foreign pension income received by a Timor-Leste resident is treated as ordinary income subject to the 10% flat rate. No exemption or reduced rate applies for foreign-sourced pension payments. Tax administration capacity is limited.","tax_rate":0.1,"locally_taxed":true},"social_security":{"notes":"No tax treaty between the US and Timor-Leste. US Social Security benefits received by a Timor-Leste tax resident are theoretically subject to local income tax, but practical enforcement is minimal. No sourcing or exemption rules specifically address foreign government pensions.","locally_taxed":true,"treaty_protection":false},"roth_distributions":{"notes":"No specific Timor-Leste provision addresses Roth accounts. Qualified Roth distributions that are genuinely return of after-tax capital may not be taxable, but no formal exemption exists. US tax law treats qualified Roth distributions as tax-free; local treatment is uncertain given absence of treaty or specific legislation.","locally_taxed":false},"us_401k_ira_distributions":{"notes":"No US-Timor-Leste income tax treaty exists. Distributions from US 401(k) and IRA accounts received by a tax resident of Timor-Leste would be treated as ordinary income subject to the 10% flat rate. In practice, enforcement and information exchange are limited.","tax_rate":0.1,"locally_taxed":true,"treaty_protection":false}}

{"rate":0.1,"notes":"Timor-Leste does not have a separate capital gains tax. Gains are generally treated as ordinary income and taxed at the applicable income tax rate, with a flat 10% rate applying to most income categories.","details":{"tax_type":"Capital Gains Tax","country_name":"Timor-Leste","country_iso_code":"TLS","source_references":["PwC Worldwide Tax Summaries - Timor-Leste","Timor-Leste Income Tax Law (Law No. 8/2008)"],"last_verified_date":"2026-06-03","general_description":"No standalone capital gains tax exists. Gains on asset disposals are folded into ordinary income. The standard flat rate of 10% applies to most taxable income for residents and non-residents. Petroleum sector gains are subject to separate rules under the Petroleum Tax Law.","corporate_capital_gains":{"rate":0.1,"tax_treatment":"Taxed as ordinary business income at the standard corporate rate of 10%."},"individual_capital_gains":{"rate":0.1,"tax_treatment":"No separate CGT regime. Gains treated as ordinary income subject to the 10% flat rate or progressive scale depending on total income."}}}

{"notes":"Dividends paid by a Timor-Leste resident company are subject to a 10% withholding tax. This withholding is generally a final tax for recipients. Timor-Leste has very limited double tax treaty coverage, so no treaty reduction is available for most recipients.","rates":[{"rate":0.1,"type":"withholding","notes":"Final withholding tax on dividends paid by resident companies. Rate applies to both resident and non-resident recipients."}]}