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Doing business in New Caledonia: Personal Taxation

Significant developments

A tax incentive (reduction over 6 years) has been introduced in December 2013 for investments in intermediate housing for rental. The tax reduction is 30% of the investment. Maximum price and effective rent conditions apply.

In August 2014 a consensus was found to implement a significant tax reform according to an agreed agenda; the first laws voted late December 2014 are applicable as of 1st January, 2015. The key change expected in the area of personal taxation is the taxation of capital gains.

Territoriality and residence

Resident individuals are subject to New Caledonian income tax on their worldwide income except as indicated in the provisions of the tax treaty between France and New Caledonia.

Nonresident individuals are subject to New Caledonian income tax on their local-source income. A 25% notional tax rate is applied to these revenues.

Individuals employed by a foreign corporation in relatation to the large nickel projects have a specific withholding tax regime.

In accordance with the Territorial Tax Code, the following persons would be considered resident.
1. Individuals who have established their home or are present for more than 183 days each year in the territory.
2. Individuals who exercise their profession in New Caledonia, unless they demonstrate it is only on a limited basis.
3. Individuals who maintain the center of their economic interests in New Caledonia.

Gross income

Employee gross income: Income from personal services (cashed income) includes salaries, commissions and allowances of all types, including those for housing, living expenses and tax reimbursements, as well as cashed participations of employees in profits.

Benefits are free of tax except for benefits derived from the use of company housing or a company car. For these benefits, valuation is not challenged if it is equal to at least the following.
1. 12% of gross salary, for housing.
2. XPF12.000 to XPF51.000 monthly for a company car, depending on the car tax classification.
3. Airline fares paid by the company are not considered benefits.

No concessions are available for short-term residents.

Capital gains and investment income Capital gains are generally tax exempt for individuals unless they result from the sale of a personal business or practice.
Net dividends received from New Caledonian companies are subject to withholding at source of 16% + a contribution of 2% (CCS). This is a final tax. Net interest income received from deposits with local banks or from shareholders’ loans in local companies, at up to an officially published rate, is also exempt from income tax.

All other investment income, including capital gains on capitalization bonds held for less than eight years, is subject to tax. The withholding tax collected locally or in France (double taxation treaty) gives the right to a tax rebate.


Business deductions Individuals are allowed to deduct an amount equal to 10% of their net salary (within an XPF800,000 limit) as a standard business deduction. However, they may elect to justify actual costs.

Other deductions There is a standard deduction of 20% of salary revenue net of the business deduction (i.e., only 80% of salary revenue net of business deduction is retained for purposes of calculating income tax). This deduction is limited to XPF1,800,000.

In addition, the following expenses are deductible.
1. Social security contributions.
2. Life insurance premiums, within an annual XPF275,000 limit.
3. Mortgage interest for a principal home, limited to XPF500,000, or with no limit, depending on the date of the loan.
4. Certain investment incentives, within an annual XPF1 million or XPF1.5 million limit.
5. Alimony (no limit) paid to a divorced spouse.
6. Superannuation contributions, within a limit reviewed annually.
7. Salaries and related charges paid for domestic help, within a limit of XPF1,320,000.

Personal allowances Tax is calculated on a family basis. The family includes self, spouse and dependents. All income earned by the family is aggregated and then divided by the following, according to the status of the individual shown.
1. Bachelor, divorced or widowed, without dependents -1.0.
2. Married with no dependents -2.0.
3. Widowed with one or more dependents -1.5.

This number is then increased by the following.
1. 1.0 per disabled child or child completing studies in France or abroad.
2. 0.5 per any other dependent child.
3. 0.5 per dependent parent.

The divided revenue is used for the scale calculation. The income tax charge determined is then multiplied by the number.

Other taxes

Social security taxes Compulsory social security taxes are levied (collected by CAFAT). A mandatory additional retirement fund (CRE and/or IRCAFEX) contributions also apply.

Local taxes on income There are no local income taxes payable in addition to central government taxes.

Tax administration

Returns: The tax year is the calendar year. Joint filing for prior-year revenue of husband and wife must be completed by April 1 each year. An additional month is allowed for individuals declaring business revenues on a nonstandard basis.

Payment of tax: There is no payroll withholding of income tax. Tax is payable by three installments: the first and second installments for year n tax are payable by March 31 of year n + 1 and July 15 of year n + 1 and are each equal to one-third of the year

n – 1 income tax charge. The balance is generally claimed in October of year n + 1.

Monthly payment of income tax is also available as an option.

Tax rates

The tax rates applicable to the share of taxable income are as follows.

Taxable income *
over not over % on excess
0   0
XPF 1,000,000 1,800,000 4
1,800,000 3,000,000 12
3,000,000 4,500,000 25
4,500,000   40

*Total assessable income less deductions divided by the number that is a function of the number of dependents and of marital status.

Individual tax calculation

Based on the law and tax rates in effect at December 31, 2013


  1. Resident who earns a salary, with wife and two children (number of shares: 2 + 0.5 + 0.5 = 3).
  2. Wife and children have no income.
  3. Husband’s income is as follows.
Net salary, allowance and bonuses (after compulsory contributions and superannuation contributions within the limits allowed by the Tax code 8,000,000
Housing benefit (12% of salary) 960,000
Investment income from abroad (not France) on which a 30% foreign tax (XPF150,000) was paid to the foreign country 500,000

  4. Allowable deductions include the following.

Domestic help 900,000

Tax computation

Determination of taxable income
Salary, allowances and bonus XPF 8,000,000
Fringe benefits 960,000
Business deduction 800,000  
Standard deduction 1,632,000 2,432,000
Add - investment total from abroad 350,000
Salaries paid to domestic help 900,000  
Taxable income XPF 5,978,000
Income per share - (5,978,000 / (1+1+2 x 0.5)) XPF 1,992,667
Determination of taxable per share
On the first 1,800,000 XPF 32.000
On the remaining 192,667 at 12% 23.040
  XPF 55.040
Determination of total tax payable
Tax per share (55.040 x 3) XPF 165,120
Tax payable XPF 165,120

The Pacific franc is pegged to the Euro at €1 = XPF119.33.

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