In Niue, businesses generally do not pay tax on their profits due to a 0% corporate income tax rate. This is a unique feature that sets Niue apart from many other jurisdictions.

Withholding Tax for Suppliers

While there's no general payroll withholding tax, the Financial Secretary may withhold up to 10% of payments to suppliers of goods or services to the Niue Government. This measure is taken against any future tax liabilities of the supplier.

Record Keeping

Employers in Niue need to maintain accurate records of wages, benefits, and any other deductions. These records might be required for reporting or auditing purposes.

Compliance

Employers should ensure they are aware of any specific regulations or obligations that might pertain to their industry or business activities in Niue. Staying updated with the latest rules and regulations is crucial for maintaining compliance and avoiding potential penalties.

In Niue, there is no traditional personal income tax system. This implies that employees do not have income tax deducted from their wages or salaries.

Withholding Tax for Suppliers

Although there's no income tax for employees, the government can impose a withholding tax for certain business transactions. As per the INCOME TAX AMENDMENT (No.2) ACT 2009, the Financial Secretary may withhold up to 10% of payments to suppliers of goods or services to the Niue Government as a contribution towards any potential tax liabilities of the supplier.

Record Keeping

Despite the absence of income tax, there may be a need to maintain detailed records of employee wages and benefits for other potential tax or reporting purposes. It's advisable to check with Niue's tax authorities for specific record-keeping guidelines.

Other Potential Deductions

While there's no income tax, other deductions might need to be considered depending on specific circumstances or agreements with employees. These could include things like pension contributions or other voluntary deductions.

In Niue, like many nations, a Value-Added Tax (VAT), also known as Goods and Services Tax (GST), is applied. This is a consumption tax that is applied to the value added at each stage of the supply chain of goods and services.

VAT Rate

The standard VAT rate in Niue is 12.5%.

VAT Registration

Businesses providing taxable services in Niue may need to register for VAT if their turnover exceeds a specific threshold. It's advisable to consult with Niue's tax authorities for the current threshold and registration requirements.

VAT on Services

Most services provided within Niue are subject to VAT at the standard rate.

Taxable Services

Examples of taxable services could include consulting, professional services, telecommunication services, rentals, and other services consumed within Niue.

Zero-Rated or Exempt Services

There might be specific services that are either zero-rated (VAT charged at 0%) or exempted from VAT entirely. For the most accurate and updated list of these services, refer to Niue's tax legislation or consult a tax advisor.

VAT Invoicing

Businesses registered for VAT must issue tax invoices that meet specific requirements as stipulated by Niue's tax authorities. These invoices must clearly display VAT calculations and other required information.

VAT Returns and Payment

VAT-registered businesses are typically required to file VAT returns periodically (e.g., monthly or quarterly) and remit any VAT collected to the tax authorities.

Important Considerations

Specific Rules

Some services might have specific VAT rules or treatments.

Imports and Exports

The VAT treatment of imported and exported services can have additional complexities. It's advisable to seek specialized advice if your business deals with cross-border services.

Niue's primary attraction for businesses lies in its overall tax environment. Companies generally don't face any income tax on their profits, creating a very favorable environment for business growth and reinvestment. Niue also has a simplified tax system compared to many other countries, with minimal focus on direct income or corporate taxes.

Specific Tax Incentives

Beyond the general low-tax environment, Niue offers a few targeted incentives.

Development Investment Incentives

The Development Investment Act encourages investment in specific sectors deemed important for Niue's economic growth. Qualifying businesses may receive tax concessions, duty exemptions, and other benefits.

Export Incentives

To promote exports, some businesses may be eligible for export incentives. These incentives could take the form of tax exemptions or reductions on income earned from exporting activities.

How to Find and Apply for Incentives

Contact relevant government departments in Niue, such as the Treasury Department or the Department of Economic Development, to inquire about currently available incentives and their eligibility criteria.