Rivermate | French Polynesia flag

French Polynesia

Tax Obligations Detailed

Discover employer and employee tax responsibilities in French Polynesia

Employer tax responsibilities

In French Polynesia, employers have several tax responsibilities, primarily involving contributions to the Caisse de Prévoyance Sociale (CPS), the social security fund.

Social Security Contributions

Employers contribute to various aspects of the CPS:

  • Illness, Maternity, Disability, Death Insurance: Employers contribute a percentage of employees' salaries to cover healthcare, disability, and related benefits.
  • Retirement Pension: Employers make significant contributions to fund employee pensions.
  • Work Accidents and Occupational Diseases: Contributions cover workplace injuries and illnesses.
  • Family Allowances: Employers contribute to finance various family benefits programs.

Other Mandatory Contributions

There are other mandatory contributions that employers must make:

  • Unemployment Contributions: There may be a small unemployment contribution required of employers.
  • Payroll Taxes: Employers may be liable for payroll taxes specific to French Polynesia, calculated as a percentage of total salaries.

Important Considerations

There are several important considerations for employers:

  • Specific Rates: Contribution rates vary and potentially change, so it's essential to get the latest figures from the CPS in French Polynesia.
  • Reporting and Payment: Employers must register with the CPS, withhold employee contributions, add their own, and remit payments on a regular basis.

Employee tax deductions

In French Polynesia, a progressive income tax system is in place. The tax brackets are subject to change, hence it's advisable to calculate income tax using official online tools or seek professional guidance.

Employee Social Security Contributions

Employees in French Polynesia contribute to the Caisse de Prévoyance Sociale (CPS), the social security fund. This includes:

  • Illness, Maternity, Disability, Death Insurance: A certain percentage of the employee's salary is deducted to cover healthcare, disability, and related benefits.
  • Retirement Pension: Contributions are made by employees to fund their pensions.
  • Family Allowances: A small contribution may be directed towards various family benefits programs.

Other Employee Deductions

  • Trade Union Dues: Employees have the option to have trade union dues deducted from their salaries.

Important Factors to Consider

  • Withholding: Employers are tasked with the responsibility of deducting income tax (if applicable) and social security contributions from their employees' salaries.
  • Specific Guidance: Tax regulations and social contribution rates are subject to change.

For complete accuracy, it's always advisable to consult with the Caisse de Prévoyance Sociale (CPS) in French Polynesia or tax professionals specializing in French Polynesia.

VAT

French Polynesia operates with a Taxes on Goods and Services system, rather than a traditional VAT system. This includes the Taxe Générale sur les Services (TGS), which is applied to the provision of services within French Polynesia, and the Taxe de Gestion et de Promotion du Service (TGPS), an additional, smaller tax on services.

Important Considerations for Services

Determining where your service is considered to be provided is crucial, as this will dictate whether TGS/TGPS apply. Specific guidance on this is likely available from French Polynesian tax authorities. It's also worth exploring whether any reverse charge mechanisms exist within the TGS/TGPS system for certain B2B services. Services provided to businesses or individuals within French Polynesia are likely subject to taxation under TGS/TGPS.

Registration and Reporting

Businesses providing taxable services within French Polynesia might be required to register for TGS/TGPS. They also likely need to file periodic tax returns and make payments of TGS/TGPS to the relevant authorities in French Polynesia.

Important Considerations

Detailed breakdowns of the TGS/TGPS system as it applies to services is scarce online. Therefore, it's essential to consult with the Tax Department of French Polynesia (Direction des ImpĂ´ts et des Contributions Publiques - DICP) and tax professionals specializing in French Polynesia.

Tax incentives

The standard tax rate for businesses is 25% for the year ending on 31 December 2023. For certain industries, such as mining companies, financial and credit institutions, and leasing companies, a higher rate of 33% applies. However, this rate will gradually decrease to 25% from 2027 onwards, subject to certain conditions.

Tax Exemptions for New Businesses

New businesses in French Polynesia can benefit from a tax exemption for their first 12 months of operation.

Reduced Rates for Renewable Energy Companies

If your business generates energy from renewable sources, you may qualify for a reduced corporate tax rate of 20%.

Specific Incentives for Large-Scale Investments

The French Polynesian government offers significant tax advantages for qualifying large-scale investments focused on hotels and tourism sectors. These incentives include:

Import Duty Exemptions

Exemption from taxes and duties on imported goods essential for construction, expansion, or renovation of hotels and other tourism-related buildings.

Exemption from Various Fees and Taxes

Exemptions cover environmental, agricultural, and fisheries fees, taxes on major projects and roads, the consumption tax, the tourist development tax, taxes on imported electrical equipment, customs fees for information technology, and the toll tax.

Property and Corporate Tax Exemptions

Businesses can receive a 15-year exemption from property taxes on completed construction and a 10-year exemption from corporate profit taxes once hotel operations commence.

No Income Tax, Wealth Tax, or Inheritance Tax

French Polynesia offers a highly favorable tax climate with no income tax on individuals, no wealth taxes, and no inheritance taxes.

Additional Considerations

Specific eligibility criteria apply for major investment incentives. Consult with relevant authorities or tax advisors in French Polynesia to determine if your business qualifies.

Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.