French PolynesiaTax Obligations Detailed

In French Polynesia, employers face specific tax obligations, primarily focused on social security contributions and other mandatory payments.

Social Security Contributions

Employers contribute to the Caisse de Prévoyance Sociale (CPS), the social security fund, covering areas such as illness, maternity, disability, death, retirement pensions, work accidents, occupational diseases, and family allowances. The specific rates for these contributions are subject to change and should be verified with the CPS. As of November 2, 2022, the employer's contribution rate is 22.99%.

Other Mandatory Contributions

Other potential contributions include unemployment contributions and payroll taxes, which are calculated based on employee salaries. It's essential to stay updated on current rates and regulations for these contributions.

Employee Tax Deductions and Contributions

French Polynesia has no personal income tax, wealth tax, or inheritance tax. However, employees contribute to the CPS for illness, maternity, disability, death insurance, and retirement pensions. Trade union dues may also be deducted if the employee chooses. Employers are responsible for withholding these contributions and remitting them to the CPS, along with their own contributions.

Value Added Tax (VAT)

The standard VAT rate in French Polynesia is 16%. Businesses providing taxable services may need to register for VAT, file regular returns, and remit payments to the relevant authorities.

Transactions Tax

Businesses may be subject to a transactions tax, with a filing deadline of March 31st of the following year. There's a simplified regime available for businesses with a turnover of 5,000,000 F.CFP or less.

Additional Considerations for Businesses in French Polynesia

• Tax Residency: Residency status impacts social security contribution obligations.
• Simplified Tax Regime: Businesses meeting specific criteria may be eligible for a simplified tax regime.
• Registration and Reporting: Timely registration with relevant authorities and adherence to reporting deadlines are crucial for compliance.
• Professional Guidance: Consulting with a local tax professional is recommended for accurate and up-to-date information regarding employer obligations.

It is important to note that tax laws and regulations can change. While the information presented here is believed to be current as of today, February 5, 2025, consulting official sources or a tax advisor for the latest details is always advisable.

As of today, February 5, 2025, French Polynesia has a distinct tax system, separate from mainland France. Several deductions and credits can reduce the overall tax burden for employees. Information specific to 2025 may not yet be fully available, and this information is based on the most recently available data.

Income Tax

French Polynesia has its own income tax system. Rates and brackets are subject to change annually, so it is recommended to consult the latest official resources from the Direction des Impôts et des Contributions Publiques (DICP) for the most up-to-date information.

Social Security Contributions

Employees in French Polynesia contribute to the Régime de solidarité de la Polynésie française (RSPF), which covers healthcare, retirement, and other social security benefits. Contribution rates and income thresholds may vary annually.

Other Deductions

• Professional Expenses: Certain work-related expenses might be deductible under specific conditions. These may include travel expenses, training costs, or professional association fees. Check with the DICP for eligibility and required documentation.

• Certain types of Savings and investments: Certain savings plans or investments may offer tax advantages. The availability and specific benefits of these schemes can change over time. Consult with a financial advisor for personalized guidance.

Tax Return and Deadlines

Taxpayers in French Polynesia are required to file an annual income tax return. The deadline for filing typically falls in the following year, but it is important to check with the DICP for the exact deadline for a given tax year. Late filing may result in penalties.

Employer Responsibilities

Employers in French Polynesia are responsible for withholding income tax and social security contributions from employee salaries. They must also declare these amounts to the DICP and provide employees with necessary documentation, such as pay slips detailing deductions. Failure to comply with these obligations can lead to significant penalties.

In French Polynesia, Value Added Tax (VAT), locally known as Taxe sur la Valeur Ajoutée (TVA), is levied on most goods and services.

VAT Rates in French Polynesia

• Standard Rate: 16% (Source [1, 2])
• Reduced Rate 1: 13% for services (Source [1])
• Reduced Rate 2: 5% for various services and imports (Source [1])
• Exempt Rate: 0% for financial services, medicines, medical supplies, books, and water (Source [1])
• Solidarity Levy: 1.5% on all VAT taxable transactions (Source [23]). Businesses cannot deduct this against output or sales VAT.

It's important to note that VAT rates can change, and it is advisable to consult updated official sources for the latest information. Please note that the 20% rate mentioned in Source [2] is for general tax and import duties which includes VAT/GST.

Thresholds for Registration

The exact thresholds for VAT registration in French Polynesia are not specified in the provided sources. Source [9] indicates that businesses providing taxable services might be required to register, however no specific data is provided in any of the sources. Generally, businesses exceeding a certain annual turnover must register for VAT.

Filing Requirements and Deadlines

While specific filing details and deadlines for VAT returns in French Polynesia are not provided, Source [9] mentions businesses are "likely" required to submit periodic returns and payments to relevant authorities. Some insight into previous deadlines is found in Source [13] where the French Polynesian Department of Taxes and Public Contributions announced a January 16 deadline for VAT filing and payment, though this was for 2023. It's important to note that deadlines may change each year, it is recommended to consult the French Polynesian tax authorities for the most current information.

Exempt Goods and Services

• Financial services
• Medicines and medical supplies
• Books
• Water

Additionally, Source [21] mentions potential VAT exemption for non-residents purchasing goods over a certain amount and fulfilling specific conditions, such as exporting the goods and providing necessary documentation. This is a separate procedure than the standard VAT exemptions and has its own set of rules.

Additional Information for Businesses

Beyond VAT, businesses operating in French Polynesia should be aware of other potential taxes, such as the corporate income tax (Source [28] mentions a rate change). It's crucial to stay informed about all applicable taxes and regulations. Always consult the latest official publications from French Polynesia's tax authorities or seek professional advice for precise details on VAT obligations, as information provided here is based on limited sources and might not be exhaustive.

French Polynesia offers a unique tax environment with no personal income tax. However, businesses face various taxes and contributions, and certain incentives are available. As of February 5, 2025, the tax landscape includes the following:

Corporate Taxes

• Standard Rate: 25% for most companies.
• Reduced Rate: 20% for specific sectors like renewable energy production.
• Increased Rate: Financial institutions, leasing companies, and mining companies currently face a 33% rate, gradually decreasing to 25% by 2027.

Other Taxes and Contributions

• No Sales Tax: French Polynesia does not have a Value Added Tax (VAT) or a general sales tax, but ongoing reforms suggest a VAT might be introduced.
• Property Tax: Real estate is subject to property tax. Rates and exemptions vary based on property type and location.
• Payroll/Social Contributions: Mandatory contributions fund social security, payable by both employers and employees, with rates varying by employment status.
• Import Duties: French Polynesia levies import duties, although reforms are underway for their eventual elimination and replacement with a VAT.
• Tourist Tax: A tax applies to accommodations based on a percentage of the annual rental value, with possible reductions for low occupancy.
• Patent Tax: Applicable to businesses starting operations.

Tax Incentives

• Tax Exemptions for New Businesses: New businesses can enjoy tax exemptions for the first 12 months of operation. Additionally, those renting properties benefit from full tax exoneration for the first three years of operation, excluding social contributions for residents.
• Sector-Specific Incentives: The corporate tax rate is reduced to 20% for companies in sectors such as renewable energy. Other incentives, deductions, and credits may exist to attract investment and promote specific business activities.
• Large Investment Incentives: Specific tax benefits, including exemptions on imported goods, and other taxes and fees, are available for substantial investments (e.g., over XPF 40 billion in 2014) in the tourism sector, such as hotels and related facilities, with potential exemptions on corporate profits and property taxes for extended periods. Eligibility criteria and details should be confirmed with official sources, as the conditions and amounts might have been updated.
• Electric/Hybrid Vehicle Incentives: Tax advantages exist for electric and hybrid vehicles, including registration tax exemptions for specific new electric vehicles and partial exemptions on importation.

Tax Administration

• Tax Representative: Non-residents carrying out taxable activities (such as rentals exceeding a specific turnover) are usually required to appoint a tax representative in French Polynesia.

It's important to consult official sources or seek professional advice for the most current and detailed information on French Polynesia's tax regulations, as specifics may change. This overview is current as of February 5, 2025.