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Taxpayer Information

Tax Exemptions

Income of King

  • Income derived by His Majesty the King shall be exempt income

Provided for in other legislation

  • Income derived by an individual entitled to privileges under the Diplomatic Privilege Act, Consular Conventions Act, Consular Relations Act and the Diplomatic Relations Act shall be exempt income to the extent provided in those Acts.

  • Income derived by an Organisation, State or Mission entitled to privileges under the Diplomatic Privilege Act, Consular Conventions Act, Consular Relations Act and the Diplomatic Relations Act shall be exempt to the extend provided in those Acts.

  • Income derived by an individual or Organisation shall be exempt income to the extent provided in Bretton Woods Agreements Act.

  • Income derived by the National Reserve Bank of Tonga shall be exempt income to the extent provided in the National Reserve Bank of Tonga Act.

  • No provision in any other law providing an exemption from any income tax imposed under this Act shall have legal effect unless also provided for in this Act.

  • Income derived by the European Investment Bank to the extent provided by Gazette No.9 of 2006.
    Income derived by the Health Promotion Fund shall be exempt income to the extent provided in the Health Promotion Fund Act 2007.

  • Income derived by the National Retirement Benefits Scheme shall be exempt income to the extent provided in the National Retirement Benefits Scheme Act 2010.
    Interest income derived from investment in securities issued by the Government of Tonga shall be exempt income.

Under international agreements

  • Any income derived by a person shall be exempt to the extent provided for in an agreement between the Government and a foreign government or public international organisation for the provision of financial, technical, or administrative assistance to the Government.

Non-profit organisations- charitable purposes and non-profit organisation

  • Income other than business income of a non-profit organisation shall be exempt.

Pensions

  • Shall be exempt income if granted to a member of the Tonga Defence Force for a disability suffered during any war or

  • A dependent relative of an individual referred to in paragraph (a) if the individual was killed or suffered a disability during any war.

  • A pension or gratuity shall be exempt income if paid to an individual under the Pensions Act, Retirement Fund Act, or Legislative Assembly Act, or any other pension or lump sum received from an approved retirement fund.

Retirement and death gratuities

Any amount received by way of gratuity or lump sum from an approved retirement fund shall be exempt income if paid on the approved fund member ceasing service on the following grounds:

  • Retirement

  • Death

  • Migration or

  • Medical reasons

Dividends

  • Dividend paid by a resident company to a member who is a resident person shall be exempt income 

Income of approved retirement funds and life insurance companies

  • Income derived by an approved retirement fund shall be exempt income.

  • An amount contributed by an employer to an approved retirement fund for the benefit of an employee of the employer shall be exempt income of the employee.

  • Any premium derived by a life insurance company in respect of a life insurance policy shall be exempt income.

Scholarships

  • Any scholarship granted to an individual to meet the cost of the individual’s education shall be exempt income, other that if the scholarship is paid directly or indirectly by an associate.

Maintenance payments

  • Any amount received as maintenance shall be exempt income.