Commonwealth of Northern Mariana Islands: Taxes and Costs

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Last Updated: Sep 14, 2007

Taxes are in practice moderate

Effective Tax Rate on Rental Income
Monthly Income	US$1,500	US$6,000	US$12,000
Tax Rate	2%	2.8%	3.5%
Click here to see a worked example
Source: Disclaimer

INDIVIDUAL TAXATION

INCOME TAX

Rental Income

Rental income is taxed at progressive rates. Taxable income is computed by deducting income-generating expenses (management fees, maintenance and repairs, etc.) and depreciation costs from the gross income. Residential properties are depreciated over a period of 27.5 years. Net rent is then taxed at the following progressive rates:

INCOME TAX
TAXABLE INCOME (US$)	TAX RATE
Up to US$15,650	10%
US$15,650 – US$63,700	15%
US$63,700 – US$128,500	25%
Source: Global Property Guide

Gross Revenue (Turnover) Tax

This tax is assessed on the net income but it is credited against income tax. The tax depends on the annual turnover and is not a graduated tax.

GROSS REVENUE TAX
ANNUAL TURNOVER, (US$)	TAX RATE
Up to US$5,000	nil
US$5,000 – US$50,000	1.5%
US$50,000 – US$100,000	2.0%
US$100,000 – US$250,000	2.5%
Source: Global Property Guide

Capital Gains Tax

All income from the islands earned by non-residents which are not effectively connected with a business is taxed at a flat rate of 30%.

However, if the taxpayer files an income tax return in the islands, he is entitled to 100% rebate on this tax. The gains are then subject to the local territorial income tax. The applicable tax rates depend on the status of the taxpayer and are subject to the changes in the US Internal Revenue laws.

Commonwealth of Northern Mariana Islands - more data and information

Guide to buying houses and registering property sales in CNMI