Income Tax is paid on all income earned in the Cook Islands and all worldwide income received by Cook Island tax residents. Taxpayers are required to file annual income tax returns. Individual income tax returns are due on 1 March the following year. The financial year in the Cook Islands is 1 January - 31 December. The due date for payment of terminal tax is 1 October the following year.
Individual Income Tax
Businesses not legally incorporated, such as most shops, must declare their revenue as personal income, either as a sole proprietor or in a partnership, whatever the case may be. Individual income tax rates are as follows:
- 0 - $10,000 exempt
- $10,001 - $30,000 25%
- $30,001 & above 30%
Note: the $10,000 exemption is for a full year of residence in the Cook Islands. The exemption is apportioned to days resident for individuals who have not been resident for a full year. Non residents do not receive the exemption, the rate of tax on earnings derived in the Cook Islands is 20 cents in the dollar for the first $4000, 25 cents in the dollar between $4001 and $24,000 and 30 cents in the dollar for every dollar over $24,000 pa.