New CaledoniaTax Obligations Detailed

In New Caledonia, employers face various tax obligations, including corporate income tax, social security contributions, and other specific levies.

Corporate Income Tax (CIT)

• Tax Rate: The standard CIT rate is 21%.
• Payment: CIT is paid in two installments, due by the end of the 7th and 11th month of the fiscal year, based on one-third of the previous year's CIT. The remaining balance is due four months after the fiscal year-end (April 30th for calendar-year taxpayers). Mining and metallurgical companies make four advance payments.
• Return Filing: Due four months after the fiscal year-end. E-filing is mandatory for companies with an annual turnover exceeding XPF 10 million.

Social Security Contributions

• Rates: Range from 0.2% to 11.67% of employee remuneration, with monthly thresholds determining the applicable rate.
• Coverage: Includes basic social security, unemployment benefits, complementary retirement plans, death/disability coverage, and complementary health coverage.

Skills Development Fund (CFP)

• Contribution: Employers with an annual payroll exceeding a certain amount contribute 0.8% or 1% of their payroll, depending on the sector.

Caledonian Solidarity Contribution (CCS)

• Rates (as of 2024):
  • Earned income: 2%
  • Replacement and solidarity income: 1.3%
  • Income from assets: 4%
  • Savings and investment products: 4%
  • Gaming proceeds: 4%
  • Securities products: 4%
  • Private real estate capital gains: 4%

General Consumption Tax (TGC)

• A value-added tax (VAT) applied to goods and services consumed in New Caledonia.
• Rates:
  • Reduced rate: 3%
  • Specific rate: 6%
  • Normal rate: 11%
  • Higher rate: 22%

Other Taxes

• Insurance Premiums Tax (IPT): 7% on insurance premiums, excluding life insurance and reinsurance contracts.
• Real Estate Capital Gains Tax: 20% on gains from real property sales, plus 4% CCS, totaling 24%. Exemptions and special calculation rules may apply.

Note: This information is based on data available as of February 5, 2025, and might be subject to changes in regulations or rates. Consulting with a local tax advisor is recommended for the most current information.

In New Caledonia, employers deduct taxes from employee salaries, encompassing social security contributions and income tax, impacting an employee's net pay.

Employer Responsibilities

• Social Charges: Employers pay social security contributions (Ruamm) covering healthcare, retirement, family benefits, work-related accidents/illnesses, and unemployment. Rates vary and comprise both employer and employee portions.
• Skills Development Fund (CFP): Employers with payrolls exceeding a certain amount contribute 0.8% or 1% of their payroll to this fund.
• Additional Contributions: Collective bargaining agreements may require additional contributions for supplementary retirement.
• Payment Deadlines: Social security contributions are usually due monthly or quarterly, depending on the due amount.
• Compliance: Staying updated on current rates and regulations is crucial, as non-compliance results in penalties. Consulting local payroll providers or tax advisors is recommended.

Employee Deductions

• Ruamm Deduction: This covers mandatory social security contributions (healthcare, disability, retirement, and family benefits), with rates based on salary levels.
• Other Allowable Deductions: Limited deductions may apply in specific circumstances, like alimony, charitable donations, and some work-related expenses.
• Income Tax: New Caledonia's income tax system uses a progressive tax system consisting of eight tax brackets. The top marginal tax rate is 45% for annual income exceeding XPF 12 million (approximately USD 106,080). Tax exemptions exist for overtime pay and exceptional bonuses until December 31, 2026. A 20% general rebate applies to salaries not exceeding XPF 9 million. Additional income tax reform measures may be introduced in 2025, pending legislative changes.
• Employment Expenses Deduction: Employees can deduct the higher of actual expenses or 10% of the balance (minimum XPF 50,000, maximum XPF 800,000).

Additional Considerations

• Tax Year: The tax year in New Caledonia aligns with the calendar year (January 1 to December 31).
• Tax Returns: Employees file annual tax returns by a specified deadline.

It is important to consult with local tax professionals for the most up-to-date information and to ensure compliance with New Caledonian tax laws, as this information is current as of February 5, 2025, and is subject to change.

In New Caledonia, the Value Added Tax (VAT), known locally as the General Consumption Tax (TGC), is levied on most goods and services.

TGC Rates

As of January 1st, 2022, New Caledonia utilizes a three-tiered TGC system:

• Standard Rate (11%): Applies to most goods and services. This rate increased from 6% in 2022.
• Higher Rate (22%): Applies to goods like imported alcohol, sugary drinks, tobacco, and vehicles, as well as long-term vehicle rentals (excluding hybrid and electric vehicles).
• Reduced Rate (3%): Applies to local produce, basic foodstuffs, cinema tickets, and passenger transport. Books are exempt.

Registration Threshold

Businesses operating in New Caledonia must register for TGC if their annual turnover exceeds a certain threshold. Originally set at CFP 15 million, the threshold is being progressively lowered, targeting XPF 10 million for goods and XPF 4 million for services. Businesses below the threshold can register voluntarily to recover input TGC on purchases. Non-resident providers of digital services have a separate threshold of XPF 7.5 million.

Filing Requirements

Registered businesses must collect TGC on sales (output TGC) and deduct TGC paid on business-related purchases (input TGC). They must file TGC returns periodically (monthly or quarterly, depending on turnover). Returns are typically filed electronically, especially if turnover exceeds the designated threshold in the previous year. For digital service providers not residing in New Caledonia, the threshold for registration is XPF 7.5 million.

Deadlines

The deadline for filing the annual tax return is four months after the end of the fiscal year (April 30th for calendar-year taxpayers). TGC returns are due monthly or quarterly, based on the business's turnover. Prepayments of corporate income tax are due by the end of the 7th and 11th month of the fiscal year.

Exemptions

Certain goods and services are exempt, including those related to health, education, financial services, public services, gambling, books, and exports. Exports are typically zero-rated, allowing businesses to reclaim input TGC.

TGC for Non-Resident Digital Service Providers

New Caledonia applies its standard TGC rate to non-resident providers of electronic services to local consumers. The registration threshold for these providers is XPF 7.5 million. Covered services include streaming media, e-books, SaaS, data storage, advertising, and certain e-learning services. These non-resident taxpayers are generally required to appoint a fiscal representative.

Penalties

Late payment of TGC incurs interest, while late filing results in penalties. Additional penalties may apply in cases of bad faith or fraud.

It's important to note that this overview provides information as of February 5, 2025, and regulations can change. Consulting official sources or seeking professional tax advice is recommended for the most up-to-date information.

New Caledonia offers various tax incentives to attract investment and stimulate economic growth.

Tax Incentives for Businesses

• Tax Exemption: Investors can benefit from tax deductions by participating in project financing. Eligible sectors include agriculture, fishing, transport, construction, hospitality, industry, and mining. "Sensitive" sectors like fishing and fuel transport require special approval. The investment must be tangible, depreciable assets, excluding intangible assets like patents.
• Tax Credit: This allows businesses to deduct a portion of their investment costs in specific sectors from their taxes, particularly export-related expenses. There's also an R&D tax credit equal to 30% of eligible expenses, capped at XPF 5 million (information valid as of April 16, 2024).
• Equipment Assistance: This program supports investments in equipment by covering a part of the cost. The provincial contribution typically doesn't exceed 50%, except for micro-enterprises, and the investment must be under XPF 100 million. Further assistance is available for equipment promoting environmental preservation, particularly for renewable energy, water conservation, and sanitation systems.
• Feasibility Study Assistance: Partial coverage of costs for pre-investment studies, including economic, legal, technical feasibility studies, impact studies, and safety diagnostics, is available for projects under XPF 100 million.

Tax Exemptions for Individuals

• Overtime Income Tax Exemption: Extended until December 31, 2026.
• Exceptional Purchasing Power Bonuses: Tax and social contribution exemptions for these bonuses are extended for 2024 and 2025.

General Tax Information

• Corporate Tax: The standard corporate income tax rate is 35%. Mining and metallurgical companies have specific incentives, including a 15-year tax stabilization regime and particular rules for loss carryback and dividend distribution.
• Personal Income Tax: Residents are taxed on worldwide income, while non-residents are taxed on New Caledonia-sourced income. Tax treaties may apply. A tax incentive with a 30% reduction over six years exists for investments in intermediate housing rentals (as of December 2013). A significant tax reform, agreed upon in August 2014, included changes to withholding taxes on dividends and the introduction of a VAT (TGA - Taxe Générale sur les Activités) planned for January 1, 2016. This reform was expected to include the replacement of existing taxes on services and some imported goods. The taxation of capital gains was also anticipated.

It's important to note that the political situation in France can impact New Caledonia's financial support and the implementation of planned incentives and reforms. The collapse of the French government in December 2024 left the 2025 budget, including provisions for New Caledonia, uncertain. As of January 2, 2025, the final portion of a previously agreed-upon financial aid package is contingent on New Caledonia's Congress adopting reforms to the General Consumption Tax (TGC).

This information is current as of February 5, 2025, and may be subject to change. Consulting official government resources and legal professionals for the latest details and personalized advice is recommended.