Cook Islands increases VAT to 15%

The New Zealand dependency of the Cook Islands will raise its standard VAT rate from 12.5% to 15% from 1 April 2014.

The dominant tourist industry will be allowed to make credit amendments going back to 1 November 2013 for any sales VAT.

The Cook Island’s VAT regime is similar to the OECD recommended model, and was introduced in 1997.  There is a VAT registration threshold of $30,000 per annum, and monthly VAT returns are due on the 20^th of the month following the reporting period end.  There is an option for smaller business to report on a cash-basis instead of the invoice accruals method.

The Cook Islands is free to set its own economic policies.  It is only a protectorate of New Zealand in terms of defense and foreign policy.