Timor-Leste Tax Rates
Timor-Leste (East Timor) operates a simple tax system with a flat 10% personal income tax rate and 10% corporate tax rate, administered by the Tax and Customs Authority. There is no VAT; instead, a 2.5% sales tax and 5% services tax apply. The economy is heavily dependent on oil and gas revenues from the Timor Sea, and the Petroleum Fund serves as the main fiscal reserve.
Top Income Tax Rate
10%
Corporate Tax Rate
10%
VAT / Sales Tax
2.5%
Capital Gains Tax
10%
Detailed Tax Information
Income Tax Brackets
Timor-Leste imposes a flat 10% wage income tax on monthly income exceeding $500. Residents are taxed on worldwide income. Non-residents are subject to 10% withholding on Timor-Leste-sourced income. The simple flat-rate system is designed to be easy to administer.
| Income Range | Tax Rate |
|---|---|
| $0 – $500 | 0% |
| $501+ | 10% |
Corporate Tax
Timor-Leste's income tax on business activities is 10% of taxable income. Petroleum operations in the Joint Petroleum Development Area (JPDA) are subject to a 30% supplemental tax in addition to the standard rate. Contractors and subcontractors in the petroleum sector face specific withholding requirements.
Standard Rate
10%
Capital Gains Tax
Capital gains in Timor-Leste are included in taxable income and subject to the standard 10% income tax rate. No preferential treatment exists for capital gains.
Rate
10%
VAT / Sales Tax
Timor-Leste does not have a VAT system. Instead, it imposes a sales tax of 2.5% on the import and domestic supply of goods, and a services tax of 5% on designated services including hotel, restaurant, and telecommunications services. These are simple turnover taxes rather than multi-stage value-added taxes.
Standard Rate
2.5%
Cryptocurrency Tax
Timor-Leste has not introduced cryptocurrency regulation or specific tax rules. The central bank has not addressed cryptocurrency. Internet penetration remains limited, restricting crypto adoption.
Tax Treaties
Timor-Leste has a very limited tax treaty network, with the most significant agreement being with Australia related to the Timor Sea petroleum operations.
Treaty Network
1
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Timor-Leste
See how much you could save by moving here from your current country.
+$14K
Tax in United States
$24K
24.4% effective
Tax in Timor-Leste
$10K
10.0% effective
You Save
59.2%
less tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
