No income, capital gains, wealth or inheritance tax — and an honest account of what that does not do for you.
Vanuatu is one of a small number of countries that levies no personal income tax at all. That fact is true, easy to verify, and routinely oversold.
What follows is the tax position as it stands, and — more usefully — what it does not do for someone who continues to live somewhere else.
| Tax | Position in Vanuatu |
|---|---|
| Personal income tax | None |
| Capital gains tax | None |
| Inheritance and estate tax | None |
| Wealth tax | None |
| Corporate income tax | None |
| Withholding tax on dividends | None |
| Rent tax | 12.5% on gross rental income — the one direct tax that does exist |
The last row is the one routinely left out of marketing material. Vanuatu levies a rent tax of 12.5% on gross rental income: individuals pay it above a threshold, companies from the first vatu. If your plan involves letting property in Vanuatu, this is the line that matters, and it is a real filing obligation rather than a formality.
Otherwise government revenue comes from indirect taxation: value-added tax, currently 15%, together with customs duties, licence fees and stamp duty. There is no personal income tax return to file, because there is no income tax to assess. Proposals to introduce income and corporate taxes have been discussed in international reporting on Vanuatu for some years; none has been enacted.
This is the part that gets skipped. Tax liability in almost every country follows tax residence, not nationality. If you continue to live, work and keep your home and family in another country, that country continues to tax you — holding a Vanuatu passport changes nothing about it.
The significant exception runs the other way: the United States taxes its citizens on worldwide income wherever they live. An American who acquires a Vanuatu passport keeps every US filing obligation, including FBAR and FATCA reporting.
Changing tax residence is a separate, evidenced process involving physical presence, centre of vital interests and, usually, exit formalities in the country you are leaving. It is doable, and it is not what buying a passport accomplishes on its own.
Vanuatu participates in international tax-transparency arrangements, including automatic exchange of financial account information. Account opening involves the usual identification of tax residence and place of birth — a second nationality does not remove either from a bank form.
One further fact should be stated because it affects practical banking: Vanuatu appears on the European Union's list of non-cooperative jurisdictions for tax purposes. The consequence is not illegality — it is friction. Some European banks and counterparties apply enhanced scrutiny to clients and structures connected to listed jurisdictions, and that should be factored into any plan before it is made.
It does not help someone who stays where they are and hopes the passport will do the work. Our position on that is unambiguous, and we would rather say it before you pay us than after. Related: what a second passport actually solves.
Tell us where you actually live and what you are trying to achieve. If a second citizenship will not deliver it, we will say so.