Solomon Islands Investment Income Guide: Dividends 0%, Interest 10-15%, Royalties 10% 2026
Solomon Islands applies withholding taxes on investment income: dividends at 0% (no WHT), interest at 10-15%, and royalties at 10%. Residents are generally exempt from withholding tax on dividends and interest. Double Taxation Treaties (Australia, NZ, UK) may reduce these rates further. Here is how investment income is taxed in 2026.
The taxation of investment income in Solomon Islands distinguishes between resident and non-resident recipients. Residents are generally exempt from withholding tax on dividends, while the treatment of interest depends on the type. Non-residents face withholding tax at rates specified in domestic law (subject to treaty reduction). The IRD administers withholding tax obligations — the payer (the Solomon Islands company or individual) is responsible for withholding and remitting the tax. Cross-border tax guide →
Real-world example: A Solomon Islands company pays SBD 200,000 in dividends to a non-resident shareholder. WHT at 0% = SBD 0, net payment = SBD 200,000. Interest of SBD 100,000 paid to a non-resident lender: WHT 15% = SBD 15,000, net = SBD 85,000. Under the Australia-SI DTT, the interest rate may be reduced to 10%. Royalties of SBD 50,000 paid to a foreign licensor: WHT 10% = SBD 5,000, net = SBD 45,000. Resident shareholders receive dividends without any WHT. Corporate tax overview →
Withholding Tax Rates on Investment Income
- Dividends — residents: 0% WHT — dividends paid to Solomon Islands resident individuals and companies are exempt
- Dividends — non-residents: 0% WHT — no withholding tax on dividends to non-residents
- Interest — residents: 0% WHT — interest paid to residents is generally exempt
- Interest — non-residents: 10-15% WHT depending on the nature of the interest and recipient
- Royalties — residents: 10% WHT — domestic rate applies to residents
- Royalties — non-residents: 10% WHT — may be reduced under applicable DTT
The 0% dividend WHT on non-residents is very favorable compared to many countries. This encourages foreign investment in Solomon Islands companies.
Double Taxation Treaty Network
Solomon Islands has a limited DTT network that reduces withholding tax rates:
- Dividends: 0% domestic rate — treaties confirm or maintain 0%
- Interest: Domestic 10-15%, treaty rates typically 5-10% with Australia, NZ, and UK
- Royalties: Domestic 10%, treaty rates typically 5-10%
Treaty benefits require the recipient to be the beneficial owner and provide a Certificate of Tax Residency from the treaty jurisdiction. Solomon Islands' treaty network includes Australia, New Zealand, UK, and a few others.
Taxation of Other Investment Income
- Bank interest: Interest on savings accounts earned by residents is not subject to withholding tax. Non-residents may be subject to 10-15% WHT
- Government securities: Interest on Solomon Islands government bonds may have specific tax treatment
- Capital gains on investments: No CGT on passive investment gains (shares, securities held long-term)
Compliance and Reporting
Solomon Islands companies paying dividends, interest, or royalties to non-residents must withhold the appropriate tax and remit it to the IRD within the prescribed timeframe (typically by the 15th of the following month). Recipients seeking treaty relief must provide: a Certificate of Tax Residency from their home country tax authority, a declaration of beneficial ownership, and any other documentation required by the IRD. Failure to withhold correctly results in the payer being liable for the unpaid tax plus penalties.
Are dividends from Solomon Islands companies exempt for residents?
Yes. Dividends paid by Solomon Islands resident companies to Solomon Islands resident individuals or companies are exempt from withholding tax. This encourages domestic investment and profit distribution within the economy.
What is the procedure for claiming treaty relief?
The non-resident recipient must submit a treaty relief application to the Solomon Islands payer, along with a Certificate of Tax Residency from their home country. The payer then applies the reduced rate at source. If tax has been over-withheld, the non-resident can file a refund claim with the IRD.