Guam Tax & Business Guide - Deloitte

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Basic facts
Population 168,560 Inflation 1.3% (2003)*
Main languages English, Chamorro GDP per head US$21,000 (PPP)
Currency US dollar (US$) GDP growth n/a
GDP sources 7% agriculture, 15% industry, 78% services
*Government sources.
Political environment

Guam is an unincorporated territory of the US. There are three government branches: executive, legislative and judicial. The legislative branch is unicameral with 15 elected senators. The executive branch is led by an elected governor, currently Felix Camacho (Republican).
Foreign trade and investment
Exports US$43.3bn (2003)* Imports US$45.8 (July 2004)*
*Government sources.

Major trading partners: Japan, Korea and Singapore.

Major exports: Trans-shipments of refined petroleum products, construction materials and fish.
Business and financing
Business forms Corporation, limited liability company, partnership, sole proprietorship

All business licences expire on June 30th of each year. Temporary licences are assessed a fee of one-fourth of the licence fee amount.

Banking and financial services, such as letters of credit, collections, money transfers, foreign exchange, bank drafts, automated tellers, import and export financing, money markets and real-estate appraisals, are provided by 16 banking and financial institutions.
Labour environment
Unemployment rate 7.7% (March 2004)* Minimum wage US$5.15 (hourly)
*Government sources.

GuamÌs minimum wage is the same as the US federal minimum wage.

Employment in Guam fell by a net 460 jobs in the year to March 2005.

GuamÌs labour legislation is patterned after that of the US and is regulated by the Guam Department of Labour. If qualified US citizens or permanent residents are not available to perform required services and employing non-immigrant aliens does not harm the wage and working conditions of US resident workers, the governor may issue temporary labour certifications.
Taxation
Corporate tax
Main rate 34%

Resident corporations are taxed on their worldwide income; non-resident corporations are taxed only on income sourced in Guam. Corporations registered under the laws of Guam are regarded as resident for tax purposes. Corporations are subject to the local territorial income tax at progressive rates to 35%, with a surcharge amounting to the lesser of US$20,250 or 5% of income over US$1m. Dividends, interest and royalties received are subject to the gross receipts tax (see Indirect tax).
Individual tax
Progressive rates to 35%

Resident individuals are subject to the local territorial income tax on their worldwide income. The tax is imposed at progressive rates to 50%. The top rate of 50% applies at varying levels of income, depending on the personal circumstances of the taxpayer. Individuals carrying on a business or conducting other activities in Guam are subject to the gross receipts tax (see Indirect tax).
Capital gains
Capital gains tax levied at 15%

A capital gains tax is levied at a rate of 15%. The gross receipts tax applies to the sale proceeds from tangible personal property at a 4% rate.
Indirect tax
Gross receipts tax 4%

Gross receipts tax (also known as business privilege tax) is imposed on resident and non-resident entities and individuals carrying on a business or conducting other activities in Guam, at a rate of 4% on gross receipts. The definition of gross receipts does not include income from stocks, bonds or real estate. Exemptions include the proceeds of life assurance policies and accident or health insurance; property acquired by gift or inheritance; salaries and wages; alimony; and a part of rental income received and sale proceeds received by contractors on certain residential buildings to be owned or operated by non-profit associations. Government agencies, charitable institutions, agricultural producers and fisheries are exempt from the gross receipts tax.
Tax administration and compliance
Tax year Corporations: accounting period; Individuals: calendar year

Corporations are taxed by assessment for the local territorial income tax. Individuals resident in Guam, citizens of Guam who are not US citizens and US citizens or residents with income sourced in Guam must file a tax return with either the US or with Guam, but not with both. The Tax Commissioner in Guam has the power to issue assessments for taxes imposed in Guam, and payment is due on assessment.

The gross receipts tax is reported and paid by the 20th day of the month after the receipt of the income.
Additional tax information
Withholding taxes Dividends, Interest and Royalties 30%. The rates may be reduced under an applicable tax treaty.
Tax treaties No comprehensive double tax treaties have been concluded. However, Guam is required to use the provisions of all US treaties when calculating the Guam net income tax liability of a foreign person.
Dividends Dividends received are subject to the gross receipts tax if they are business income.
Groups Parent companies owning 80% or more of the shares of a subsidiary may file a single tax return with the subsidiary on a consolidated basis.
Incentives Insurance; trusts; offshore lending; free-trade zone; there are no import duties.
Other taxes Accumulated earnings tax, Excise duty (use tax), Hotel occupancy tax, Personal holding company tax, Real property tax, Registration fees, Self-employment tax.