Tonga

{"ftc_utility":"low","fbar_trigger_notes":"US citizens with Tongan bank accounts exceeding USD 10,000 aggregate must file FBAR. Tonga's banking sector is small, centered on ANZ and BSP branches; accounts are straightforward to report. No local banking secrecy issues.","ftc_utility_reason":"Tonga's top income tax rate is 20%, which is below the US top marginal rate. For earned income, the FEIE is typically more advantageous. FTC may shelter some tax on income above the FEIE limit, but the lower Tongan rate means partial shelter only.","presence_day_count_notes":"Tonga does not issue long-stay visas specifically for expats; most stays are on tourist entries extendable up to 12 months. Maintaining 330 qualifying days is practically achievable but requires attention to entry and extension rules. No formal residency visa complicates bona fide residence documentation.","typical_qualifying_method":"either","housing_exclusion_available":true,"physical_presence_test_applies":true,"estimated_housing_exclusion_usd":12000,"local_tax_rate_on_earned_income":0.2,"bona_fide_residence_test_applies":true}

{"pension_income":{"notes":"Foreign pension income received by Tonga tax residents is subject to income tax at progressive rates up to 20%. No exemption or reduced rate applies for foreign pensions absent a treaty.","tax_rate":0.2,"locally_taxed":true},"social_security":{"notes":"No US-Tonga totalization or tax treaty. US Social Security benefits received by a Tonga resident are treated as foreign-source income subject to Tongan income tax.","locally_taxed":true,"treaty_protection":false},"roth_distributions":{"notes":"No treaty protection. Roth distributions may be treated as income by Tongan tax authorities since no bilateral agreement defines their tax-exempt character. Taxed at progressive rates up to 20%.","locally_taxed":true},"us_401k_ira_distributions":{"notes":"No US-Tonga income tax treaty exists. Distributions from US 401k or IRA accounts received by a Tonga tax resident would be treated as foreign-source income and subject to Tongan income tax at progressive rates up to 20%. Residents are taxed on worldwide income.","tax_rate":0.2,"locally_taxed":true,"treaty_protection":false}}

{"rate":0.2,"notes":"Tonga does not have a separate capital gains tax. Gains of a capital nature are generally not subject to income tax under the Income Tax Act, though gains from trading activities may be treated as ordinary income.","details":{"tax_type":"Capital Gains Tax","country_name":"Tonga","country_iso_code":"TON","source_references":["Tonga Revenue Services - Income Tax Act","IMF Fiscal Affairs Tonga Reports"],"last_verified_date":"2026-06-03","general_description":"No standalone capital gains tax exists in Tonga. Disposal gains on capital assets are generally exempt. Gains arising from a business of buying and selling assets may be assessed as ordinary income at progressive rates up to 20%.","corporate_capital_gains":{"rate":0.25,"tax_treatment":"No separate CGT; capital gains from asset disposals are generally exempt. Gains from trading activities assessed as ordinary business income at 25% corporate rate."},"individual_capital_gains":{"rate":0.2,"tax_treatment":"No separate CGT. Capital gains generally exempt. Gains from habitual trading taxed as ordinary income at progressive rates up to 20%."}}}

{"notes":"Dividends paid by Tongan companies to residents are subject to a withholding tax. Non-resident dividend recipients face withholding at a flat rate. Tonga has no tax treaty network, so no reduced treaty rates apply.","rates":[{"rate":0.1,"type":"withholding","notes":"Withholding tax on dividends paid to resident individuals is 10%, credited against final income tax liability."},{"rate":0.15,"type":"withholding","notes":"Withholding tax on dividends paid to non-residents is 15%; no treaty reductions available."}]}