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Palau 10% GST implementation January 2023

Gross Revenue Tax to be replaced by Goods and Services Tax 2023

The Pacific island state of Palau is to introduce a Goods and Services Tax (GST) from 1 January 2023. The new indirect tax system will be based on the broad-based Australian GST regime.

Palau joining the global VAT family will take the number of countries with VAT to 174.

GST replaces Gross Revenue Tax

This will replace the existing Gross Revenue Tax (GRT). The key features will include:

  • The GST registration threshold will be USD300,000;
  • Exports will be zero rated;
  • Imports liable to GST; and
  • Financial services will be exempt

Palau’s tax regime of using  GRT favours large, established, vertically-integrated businesses, while disadvantaging small start-ups, family businesses and boutique operations, and also GRT discourages international investment. GRT is not well suited to the service-based high-value tourism economy the Republic is striving to build.

Determine or verify global Goods and Services or Value Added Tax calculations on individual or batch transactions with our Advisor and Auditor services.


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