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Guam Tax Guide 2026: Mirror Code System, Residency & Guam DRT Filing

Daniel · CountryTaxCalc Updated May 2026
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KEY INSIGHT
Guam operates a 'mirror code' income tax system — effectively a copy of the US Internal Revenue Code, but administered by the Guam Department of Revenue and Taxation (Guam DRT) rather than the IRS. Bona fide residents of Guam file their tax return with Guam DRT, reporting worldwide income, and generally have no separate US federal return or federal tax to pay (IRS Publication 570). Because Guam's tax law and rates mirror the US code, the rates are the same as federal rates; the tax is simply paid to the Guam government instead.
At a glance

Key Facts

Guam Mirror Code Tax System
The Guam Territorial Income Tax (GTIT) mirrors the US Internal Revenue Code — Guam DRT uses the same brackets, deductions, credits, and filing requirements as the federal system, with 'Guam' substituted for 'United States.' 2026 federal/Guam tax brackets (single filer): 10% on first $12,400; 12% on $12,400–$50,400; 22% on $50,400–$105,700; 24% on $105,700–$201,775; 32% on $201,775–$256,225; 35% on $256,225–$640,600; 37% above $640,600. Bona fide Guam residents file a Guam Form 1040 with Guam DRT, reporting worldwide income, rather than a federal return.
Which Return Bona Fide Guam Residents File
Under IRS Publication 570, a bona fide resident of Guam files one return, with Guam DRT, reporting income from all sources (including US-source income such as mainland investments), and generally does not file with or pay tax to the IRS (self-employed residents may still owe self-employment tax via Form 1040-SS). A US citizen or resident alien who is not a bona fide Guam resident but has Guam-source income files with the IRS, attaching Form 5074 if AGI is $50,000 or more and Guam-source gross income is $5,000 or more. Being in Guam solely under military orders does not make a service member a bona fide Guam resident.
Bona Fide Residency in Guam
Bona fide residency in Guam is determined under IRC §937, using a three-part test: (1) Presence test — most commonly met by being physically present in Guam for at least 183 days in the tax year (IRS Publication 570 lists other ways to meet it); (2) Tax home test — Guam is your primary place of business/employment; (3) Closer connection test — closer connection to Guam than to the US or any other location. Being in Guam solely under military orders does not qualify a service member as a bona fide resident. Others, including private-sector workers and retirees who genuinely live and work in Guam, are typically bona fide residents if they meet all three tests.
Guam Real Property Tax
Guam's real property tax is administered by the Guam Department of Revenue and Taxation. Guam's effective property tax rate is among the lowest in the US (a 2018 Office of Public Accountability review put it at about 0.17%, using 2016 data). Home exemptions are available for primary residences. Compared to US states, Guam property taxes are very low. Property in Guam can be purchased by US citizens and foreign nationals (with certain restrictions on alienation by non-Chamorros under Chamorro Land Trust provisions).
Guam Business Tax Considerations
Businesses operating in Guam pay Guam income tax to DRT at the mirror code rates. Guam also levies a Business Privilege Tax (BPT) — a gross receipts tax at 5% on most business transactions. BPT is in addition to income tax. These gross receipts taxes are not income taxes and are not creditable as foreign taxes on US returns (they are not levied on income). Guam's FREEPORT status exempts many imported goods from US Customs duties — historically an economic advantage for the island's retail and tourism economy.
Introduction

Guam is a US territory in the Western Pacific — residents are US citizens, but the island has its own separate tax authority, the Guam Department of Revenue and Taxation (DRT). Guam's tax system is unique in the US territorial framework: rather than following the same tax rules as the 50 states, Guam uses a 'mirror code' — the Guam Territorial Income Tax (GTIT), which replicates the US Internal Revenue Code with 'Guam' substituted for 'United States.' This means Guam tax brackets, deductions, and rates mirror the federal system, but the revenue goes to the Guam government, not the federal Treasury. The key point for most Guam residents is that bona fide residents of Guam file one return, with Guam, reporting income from all sources, and generally owe no separate US federal income tax (IRS Publication 570).

Section 01

How Tax Filing Works for Guam Residents

Understanding who files where is the central question for Guam tax compliance:

Bona fide Guam resident with all income from Guam: File only with Guam DRT (Guam Form 1040). No federal 1040 required (IRS Publication 570). Pay Guam income tax at mirror code rates. Deadline: April 15.

Bona fide Guam resident with some income from the US: Still files only one return, with Guam DRT, reporting worldwide income; tax withheld or paid to either Guam or the US is counted on that return. Self-employed residents may also need Form 1040-SS for self-employment tax.

US citizen or resident alien who is not a bona fide Guam resident, with Guam-source income: File with the IRS on worldwide income, attaching Form 5074 if AGI is $50,000 or more and Guam-source gross income is $5,000 or more.

Military stationed in Guam: Presence solely under military orders does not make you a bona fide Guam resident — generally file a federal 1040 with the IRS and a return for your home state, if required.

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FAQ

Frequently Asked Questions

Do I pay federal income tax if I live and work in Guam?

A bona fide resident of Guam generally files one return, with Guam DRT, and does not pay a separate US federal income tax. The Guam return reports worldwide income at the same rates as the US federal system, and that revenue stays with the Guam government. Under IRS Publication 570, filing and paying in full with Guam means you are generally not liable for filing with, or paying tax to, the IRS (self-employed residents may still owe self-employment tax via Form 1040-SS). The practical result for most Guam private sector workers: one tax return to Guam DRT.

How does the Guam mirror code differ from the US tax code?

Guam's Territorial Income Tax (GTIT) is a copy of the US Internal Revenue Code with 'Guam' substituted for 'United States' wherever relevant. This means: same tax brackets; same standard deduction amounts; same dependent exemptions and child tax credit amounts; same itemized deduction rules; same self-employment tax rates. The key practical difference is the filing destination (Guam DRT, not IRS) and the fact that bona fide residents pay Guam rather than the IRS. Some federal provisions don't have a Guam equivalent (e.g., certain federal credits or programs specific to the 50 states). Guam-specific laws also modify some provisions — consult a Guam tax professional for complex situations.

What if I'm a federal employee or US military stationed in Guam?

Being in Guam solely under military orders does not make a service member a bona fide Guam resident (IRS Publication 570); service members generally keep their home-state tax residence, file a federal return, and file a home-state return if one applies. Federal civilian employees have no automatic status either way: whether you are a bona fide Guam resident depends on meeting the presence, tax home and closer connection tests. If you are a civilian who relocated to Guam and genuinely made it your home, you may qualify and file with Guam DRT; otherwise you file with the IRS.

Are there sales taxes or other taxes in Guam?

Guam has no general sales tax in the US state sense. Instead, Guam levies a Gross Receipts Tax (GRT) on businesses at 5% of gross receipts — this is embedded in prices for goods and services (similar to a sales tax from the consumer perspective but levied on the business, not the consumer). Guam also has a Use Tax of 4% on imports, local purchases and inventory used. Fuel taxes apply. Real property tax is assessed at very low rates (Guam's effective rate is among the lowest in the US).

Can I move to Guam to reduce my US taxes?

Not by itself. Guam's income tax mirrors the US Internal Revenue Code with the same rates, so becoming a bona fide Guam resident changes whom you pay (Guam instead of the IRS), not how much, unless a Guam-specific incentive applies to you. Bona fide residency also requires genuine relocation: the presence, tax home and closer connection tests under IRC §937, not just spending 183 days there. Establishing Guam residency purely for tax reasons while keeping your real economic and personal life elsewhere would likely fail the closer connection test. Many Americans do relocate to Guam for work, military family connections, or lifestyle reasons; consult a Guam tax professional about your own situation.
Disclaimer:This guide provides general tax information for educational purposes only. Guam's mirror code tax system and IRC §937 bona fide residency rules are complex and fact-specific. Military, federal employee, and non-resident rules differ significantly. Consult a Guam DRT registered tax professional and/or a US tax attorney for advice specific to your situation. Nothing in this guide constitutes tax or legal advice.
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