Capital Gains Tax in Micronesia

Micronesia does not have a separate capital gains tax regime. Capital gains are generally taxed as ordinary income under the personal income tax or corporate income tax system.

Scope of Capital Gains Tax

Capital gains in Micronesia are generally taxed as ordinary income for both individuals and corporations. There is no separate capital gains tax regime; gains are integrated into the regular income tax framework.

Capital Gains for Individuals

Real Estate Gains

Gains from the sale of real estate are subject to tax at progressive PIT rates (0-10%). The gain is included in the individual's annual income and taxed accordingly.

Exemptions may apply for the sale of a primary residence.

Securities Gains

Gains from the sale of securities are generally taxed as ordinary income for individual investors who trade regularly. Occasional investors may be treated differently.

Capital Gains for Corporations

Corporate capital gains are treated as ordinary business income and taxed at the standard corporate income tax rate of 30% (or 21% for small businesses). This includes gains from the sale of fixed assets, investments, and intellectual property.

Exemptions and Reliefs

Calculation of Gains

The capital gain is calculated as the difference between the sale price and the acquisition cost, adjusted for:

Filing and Payment

Individuals must declare capital gains in their annual tax return. Payment of tax due must be made by the filing deadline. Corporations report capital gains as part of their annual corporate tax return.

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