American SamoaTax Obligations Detailed

In American Samoa, employers face specific tax obligations under both federal and territorial laws.

Federal Taxes

• Social Security (OASDI): Employers contribute 6.2% of each employee's wages up to the 2025 wage base limit of $176,100.
• Medicare: Employers contribute 1.45% of each employee's wages, with no wage base limit. These rates are consistent with federal regulations.

Territorial Taxes

• American Samoa Wage Tax: A 2% wage tax is applied to all wages earned in American Samoa. This tax is distinct from and in addition to federal taxes.
• Quarterly Payments and Reporting: Employers must file reports and remit taxes to the tax office quarterly. Deadlines are the last day of the month following each quarter (e.g., April 30th for January 1st to March 31st).
• Form W-2AS (American Samoa Wage and Tax Statement): Employers must furnish this form to employees by January 31st and file it with the Social Security Administration by February 28th (paper filing). The deadline for including it with American Samoa Tax Returns is April 15th.

Additional Information for Employers

The tax filing season in American Samoa commences on January 27, 2025. There is no income tax in American Samoa. Businesses with annual taxable income exceeding $100,000 are subject to an additional tax, which is the lesser of 5% of the amount exceeding $100,000 or $11,750. There is also an alternative minimum business tax of 1% of gross annual revenue, applicable if it surpasses the corporate income tax amount. This alternative tax does not apply during the first two years of operation. Generally, foreign individuals are subject to withholding tax on income from American Samoa.

Please note that this information is current as of February 5, 2025, and may be subject to change.

American Samoa's tax system mirrors the US Internal Revenue Code (IRC) with key distinctions.

Residency Rules and Income Sourcing

• Bona Fide Residents: Individuals deemed bona fide residents of American Samoa for the entire tax year generally exclude income sourced within American Samoa or effectively connected to a trade or business there from their gross income. Income from services performed as a US government employee is taxable.
• Non-Residents: Non-residents are taxed on income derived from sources within American Samoa. Specific rules apply depending on the income type (e.g., salary, business income, investments).

Tax Rates and Withholding

• Federal Taxes: While American Samoa has its own tax system, residents generally file US tax returns. The IRS provides specific W-2AS forms for American Samoa.
• Local Taxes: American Samoa's corporate income tax rates are 15% on the first USD 50,000 and 25% on amounts exceeding USD 50,000.

Payroll Deductions

• Pre-tax Deductions: Similar to US payroll deductions, pre-tax deductions reduce taxable income. These can include contributions to health insurance and retirement plans if offered.
• Post-tax Deductions: Deductions such as Roth IRA contributions, charitable donations, and certain garnishments are made after taxes are calculated.
• Mandatory Deductions: Depending on the nature of the employment and income levels, mandatory deductions can include Social Security and Medicare taxes for non-governmental employees.
• FICA Taxes: For 2025, the Social Security tax rate is 6.2% for both employer and employee, capped at a wage base of $176,100. The Medicare tax rate is 1.45% for both employer and employee, with no wage base limit. Additional Medicare Tax of 0.9% applies to income exceeding $200,000. These amounts are subject to change in future years.
• Withholding: Employers are responsible for withholding the correct taxes based on employees' W-4AS forms and applicable regulations.

Key Considerations

• Consult a tax professional: Tax laws are complex and individual circumstances may vary. Consulting with a tax advisor specializing in American Samoa is recommended.
• Check for Updates: Tax laws and regulations can change. Refer to official government resources for the most up-to-date information. This information is current as of February 5, 2025, and may be subject to change.

American Samoa does not have a Value Added Tax (VAT) or Goods and Services Tax (GST).

Taxes in American Samoa

Instead of VAT/GST, American Samoa has other taxes including:

• FICA Taxes: These are Social Security and Medicare taxes, similar to those in the United States. Both employers and employees contribute. As of 2025, the Social Security tax rate is 6.2% for both the employer and employee, up to a wage base limit. Medicare tax is 1.45% for both employer and employee, with no wage base limit. There is an additional Medicare tax of 0.9% for employee earnings above a certain threshold.
• Wage Tax: Employees also pay a 2% wage tax on their earnings.
• Gross Receipts Tax (GRT): Businesses may be subject to GRT on income from sales of goods and services. The rate and applicability vary based on the service.
• Excise Taxes: These taxes apply to specific goods and services, such as alcohol and tobacco.
• Corporate and Individual Income Taxes: Similar to federal income taxes in the U.S.

Tax Filing and Deadlines

• Quarterly Filing: Employers must file reports and pay taxes quarterly. Deadlines are the last day of the month following the end of each quarter (e.g., January 31st for the quarter ending December 31st).
• Annual Filing: Income tax returns are due annually.
  • Businesses should adhere to the standard tax year (January to December) unless they have obtained approval for a substitute tax year from the Commissioner.
  • Returns are due by the end of the third month following the tax year's end (e.g., March 31st for a January-December tax year).

Taxpayer Identification Number (TIN)

All businesses operating in American Samoa must register for a TIN, which is issued upon receiving a business license. This unique number should be used for all business transactions and included on invoices and receipts. Sharing or misusing a TIN is prohibited.

Please note that this information is current as of February 5, 2025, and might be subject to change.

American Samoa offers tax incentives primarily aimed at fostering economic development and attracting businesses. These incentives generally take the form of exemptions from specific taxes rather than credits or deductions.

Tax Incentives in American Samoa

The American Samoa government promotes economic development and capital investment through tax incentives, primarily exemptions. These exemptions can apply to various taxes, duties, business license fees, and similar charges levied by the government.

• Eligibility: Businesses seeking tax exemptions usually need to demonstrate how their establishment or expansion within American Samoa will contribute to economic growth, job creation, or other public benefits.

• Types of Incentives: Tax exemptions can be granted for the establishment or expansion of qualifying industrial or business enterprises, potentially covering income tax, property tax, excise tax, gross receipts tax, and business license fees. There is a push to renew the American Samoa Economic Development Credit (ASEDC), which expired on January 1, 2022. This credit, also known as 30A, aimed to stimulate investment and job creation in American Samoa by offering tax reductions for qualifying businesses. Currently, however, the ASEDC is not available. The ASEDC primarily benefits the tuna canning industry, American Samoa's largest private employer. The potential renewal could significantly impact the territory's economy and support future diversification efforts. This credit could offset federal taxes on income earned within American Samoa, offering a potential advantage to businesses operating there.

• Application Procedure: Businesses must apply to the American Samoa Government Tax Office for tax exemptions, demonstrating their qualifications and the potential benefits their operations will bring to the territory. Specific procedures and requirements can be obtained from the Tax Office.

• Limitations: The maximum exemption period cannot exceed ten years. Exemptions are also limited to activities and income generated within American Samoa.

Tax Exemptions

• Exemption Limits: The exemption can be terminated early if the total amount of forgiven taxes reaches 200% of the noncurrent investment.
• Targeted Industries: Tax exemptions can be granted to various sectors, with specific emphasis on industries that contribute to the territory's economic development goals. While the primary industry is tuna canning, the tax incentives aim to attract diverse investments in areas such as tourism, manufacturing, and other suitable businesses.

General Tax Information

• While American Samoa has its own tax system modeled on the U.S. Internal Revenue Code (as of December 31, 2000), there are several key differences. Information regarding American Samoa's tax system can be obtained from the American Samoa Government Tax Office.
• American Samoa's separate tax system excludes certain federal credits for residents, including the Earned Income Credit, Additional Child Tax Credit, Credit for Other Dependents, and the American Opportunity Tax Credit. Residents should consult the local tax office to determine eligibility for similar territorial credits.

It's important to consult with the American Samoa Government Tax Office for the latest details on tax incentives, as regulations can change. The information provided here is current as of today's date, February 5, 2025, and may be subject to updates.