Employers operating in American Samoa have several tax responsibilities.

Federal Insurance Contributions Act (FICA) Taxes

Employers are required to contribute to Social Security and Medicare taxes under the Federal Insurance Contributions Act (FICA).

• Social Security (OASDI): Employers must contribute 6.2% of each employee's wages up to the annual wage base limit.
• Medicare: Employers must contribute 1.45% of each employee's wages. There's an additional 0.9% Medicare surtax for employees earning above certain income thresholds.

American Samoa Wage Tax

In addition to FICA taxes, employers in American Samoa must also pay a wage tax.

• Employer Wage Tax: Employers must pay an additional 2% wage tax on the earnings of each employee.

Important Considerations

There are also other considerations that employers need to keep in mind.

• Employer-Provided Benefits: If you provide benefits like health insurance, the cost of these benefits may need to be reported on Form W-2AS.
• Recordkeeping: Maintain accurate payroll records for at least three years as per IRS recommendations.

Employees in American Samoa have certain taxes deducted from their wages. These deductions are part of the Federal Insurance Contributions Act (FICA) Taxes and the American Samoa Wage Tax.

Federal Insurance Contributions Act (FICA) Taxes

Employees contribute to two main types of FICA taxes:

• Social Security (OASDI): Employees contribute 6.2% of their wages up to the annual wage base limit. The limit changes each year, so it's important to check the current year's limit.
• Medicare: Employees contribute 1.45% of their wages. An additional 0.9% Medicare surtax applies to wages exceeding specific income thresholds. The details of these thresholds change periodically, so it's crucial to stay updated.

American Samoa Wage Tax

In addition to FICA taxes, employees in American Samoa are also responsible for a 2% wage tax on their earnings.

Reporting

These deductions will be reported on the employee's Form W-2AS, which is similar to the Form W-2 used in the U.S. mainland. This form provides a detailed breakdown of the employee's earnings and the taxes deducted from those earnings.

In American Samoa, there is no Value-Added Tax (VAT) system. Instead, businesses may be subject to other types of taxes depending on their specific activities.

Potential Tax Implications for Services

Businesses providing services in American Samoa should consider the following potential tax implications:

• Gross Receipts Tax (GRT): This may apply to the income generated from the sale of services. The specific rate and applicability depend on the type of service provided.
• Excise Taxes: Some services could be subject to excise taxes in American Samoa. It's crucial to determine if the services you provide fall under any excise tax categories.

Tax laws and regulations

Please note that tax laws and regulations are subject to change. Businesses are always advised to consult updated information from the American Samoa Department of Treasury or a qualified tax professional to ensure compliance.

American Samoa offers a variety of tax incentives to attract and support businesses, aiming to stimulate economic development in the territory. These incentives include corporate income tax exemptions, excise tax exemptions, import duty exemptions, and wage tax exemptions.

Tax Incentives in American Samoa

Corporate Income Tax Exemptions: Qualifying businesses may receive temporary exemptions from corporate income taxes. These exemptions are granted on a case-by-case basis, and their duration and scope can vary.

Excise Tax Exemptions: Eligible businesses may receive exemptions from excise taxes on specific goods and services used in their operations.

Import Duty Exemptions: To reduce operational costs, qualifying businesses may be exempt from import duties on certain raw materials, machinery, and equipment.

Wage Tax Exemptions: Some new businesses may qualify for exemptions from paying the American Samoa wage tax on employee earnings.

Eligibility for Tax Incentives

To qualify for tax incentives in American Samoa, businesses usually need to meet specific criteria. These often include the industry sector, potential for significant job creation within American Samoa, a minimum investment amount, and a commitment to sourcing materials and services locally.

Obtaining Tax Incentives

The process for applying and obtaining tax incentives in American Samoa typically involves contacting the Tax Exemption Board within the American Samoa Government, submitting a detailed application, and negotiating terms with the Tax Exemption Board.

Please note that tax incentives and eligibility can change. Always refer to the American Samoa government's tax agencies or a qualified tax professional for the most up-to-date information.