28 July 2022

Understanding Taxes and Tax Residency In Grenada

Grenada offers a direct path to citizenship with the Citizenship By Investment (CBI) program offering individuals and their families the opportunity to gain a reputable passport in exchange for an investment within the country. In addition to being one of the most beautiful islands in the world. Grenada boasts an attractive tax regime as well.

Individuals looking to move their tax residency status to Grenada, can qualify by residing within Grenada for a minimum of 183 days within the fiscal year. The tax identification number (TIN) can be requested from the Grenada Inland Revenue Department with a local Grenada driver’s license.

The currency used in Grenada is the Easter Caribbean Dollar (XCD).

Taxes in Grenada

Inheritance, Wealth and Capital Gains Tax

Grenada does not impose any taxes on inheritance, wealth or capital gains for residents or non-residents.

Income Tax

Grenada imposes a progressive income tax scale:

Grenada-Income-Tax

Social Contributions

Employees are subject to 5% social security contributions whereas employers are subject to 4% of the employee’s wage.

Gift Tax

Grenada imposes transfer taxes on certain types of gift exchanges with an exemption up to the first$150k on a real estate gift.

Withholding Tax

Withholding tax of 15% is imposed on payments to non-residents including dividends, interest and royalties for both individuals and corporations. Grenada does not impose any withholding taxes on payments to citizens or residents.

Corporate Tax

Resident companies are subject to a corporate tax of 28%.

Non-resident companies are tax exempt on all foreign sourced income, however will be subject to taxes on locally sourced income and a withholding tax of 15% is imposed on dividends, interest and royalties for payments to non-resident individuals and companies.

VAT

The standard VAT is 15% with a reduced VAT of 10% for hotel and restaurants and 0% for certain goods and services such as education, medical and food items such as milk and bread.

Stamp Duty

Grenada-Stamp-Duty

In addition, all transactions are subject to a 1% stamp duty tax.

Property Tax

Grenada imposes property tax accordingly:

Grenada-Property-Tax

Regulatory

CRS requires financial institutions to identify customer tax residencies and report financial accounts held directly or indirectly by foreign tax residents to local tax authorities. It also requires tax authorities (in participating countries) to exchange this information. Grenada currently holds a bilateral agreement with: Australia, Belgium, Denmark, Faroe Islands, Finland, France, Germany, Greenland, Iceland, Netherlands, Norway, Sweden, and the UK. Please refer to OECD´S website for more information on CRS reporting and TIEAS.

Individuals with accounts and other assets in Financial Institutions operating within Grenada, may have their account and asset information reported to the United States Internal Revenue Service (IRS) where that individual meets the criteria of a U.S. Person, and where the account meets the criteria as a Reportable Account under FATCA.

Double Taxation Treaties

Grenada has signed double taxation with other CARICOM member countries and the UK.

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