In New Caledonia, employers have several tax responsibilities. One of these is the payment of social charges on behalf of their employees. These charges encompass various contributions such as health insurance, retirement, family benefits, work-related accidents and illnesses, and unemployment. The rates for these social charges vary and are composed of both employer and employee portions. It's important to note that these rates are subject to change.

Skills Development Fund

Employers with an annual payroll exceeding a certain amount are obligated to contribute 0.8% or 1% (depending on the sector) of their payroll toward the Skills Development Fund. This contribution is known as the Contribution for Professional Formation (CFP).

Additional Contributions

In certain situations, employers with specific collective bargaining agreements may be required to make additional contributions for complementary retirement.

Payment Deadlines

The deadlines for the payment of social contributions are typically monthly or quarterly, depending on the amount of contributions due.

Important Considerations

Staying up-to-date with the most recent social charge rates and regulations is crucial. Failure to comply with social charge payment deadlines can result in penalties and interest. To ensure understanding and compliance with specific obligations, it may be beneficial to consult with a local payroll provider or tax advisor.

In New Caledonia, employee tax deductions primarily consist of the Ruamm deduction and other allowable deductions.

Ruamm Deduction

The Ruamm deduction covers mandatory social contributions for healthcare, disability, retirement, and family benefits. The rates for this deduction vary depending on the salary level.

Other Allowable Deductions

There are a limited number of deductions that may be applicable under specific circumstances. These may include alimony payments, charitable donations, and certain work-related expenses.

Calculation of Income Tax

Income tax in New Caledonia is calculated progressively based on taxable income after deductions. The tax rates are divided into brackets, with higher rates applying to higher income levels.

Eligibility

All individuals earning taxable income in New Caledonia are subject to income tax. This includes both residents and non-residents earning income from sources within the territory.

Filing and Payment

Employees in New Caledonia generally do not file their own tax returns. Their employer withholds income tax and social contributions directly from their salary through a pay-as-you-earn (PAYE) system.

The standard TGC rate for most services in New Caledonia stands at 11% as of January 1st, 2022. This applies to the majority of services rendered within the territory. There are limited exemptions for specific types of services, which can include medical and healthcare services, educational services, financial services, and certain cultural and social services.

Filing Procedures

Businesses providing taxable services in New Caledonia are generally required to:

• Register for TGC: Businesses exceeding a specific revenue threshold must register for TGC with the local tax authorities, usually the Direction des Services Fiscaux.
• Charge TGC: Include TGC in your invoices to customers at the applicable rate.
• File TGC Returns: Submit regular TGC returns (frequency depends on business size) to the tax authorities, reporting collected TGC and any eligible deductions.
• Remit TGC Payments: Pay the net TGC liability on time as per your filing schedule.

Authoritative Sources

The Direction des Services Fiscaux in New Caledonia is the official tax authority.

Important Notes

Tax laws are subject to change. It's always best to consult the latest official sources or professional tax advisors for the most up-to-date information. Specific exemptions and filing requirements may vary based on the nature of the services provided and the size of the business.

Tax incentives are financial benefits that governments offer to businesses to encourage specific economic activities. They can take various forms, including tax exemptions, tax credits, and free zone mechanisms.

Tax Exemption

A tax exemption program allows businesses to benefit from a corporate income tax exemption for a set period in return for their investment in specific sectors. To qualify, the investment must be made by a company established in New Caledonia or a foreign company with a subsidiary operating there. The project must fall within eligible sectors like agriculture, tourism, industry, or mining. A minimum investment amount may apply. Businesses should contact the Direction des Services Fiscaux (DSF), the local tax authority, to obtain application forms and guidance.

Tax Credit

This program allows businesses to claim a credit against their corporate income tax liability for certain expenses. Types of tax credits include:

• Export Credit: Reduces tax liability for expenses related to exporting goods and services.
• Research and Development (R&D) Credit: Provides tax relief for costs associated with R&D activities.
• Investment Credit: Offers a tax credit for investments in specific sectors or equipment.

Eligibility criteria vary depending on the specific tax credit program. Businesses should consult the DSF for details. Similar to the Tax Exemption program, businesses typically apply through the DSF.

Free Zone Mechanism

Introduced in 2019, this scheme allows companies operating within designated free zones to benefit from progressive tax exemptions on income tax, property tax, and payroll taxes over a six-year period. To qualify, businesses must establish operations within a designated free zone and meet specific activity requirements. Contact the relevant free zone authority for details on eligibility and the application process.