Individual income tax rate in Grenada is 30%.
An individual who is resident, ordinarily resident and domiciled in Grenada is subject to income tax on his or her worldwide income as it arises. Non-residents are subject to tax on income accruing directly or indirectly from the carrying on of business in Grenada. Income from any source other than from the carrying on of business shall be liable to withholding tax and not form part of the assessable income.
Broadly, an individual is domiciled in the country or state which he regards as his permanent home. He acquires a domicile of origin at birth, normally that of his father, and retains it until he acquires a new domicile of choice. To acquire a domicile of choice, a person must sever his ties with his domicile of origin and settle in another country with the clear intention of making it his permanent home.
In ascertaining the chargeable income of an individual who is resident in Grenada, the amount of $60,000 per annum is allowed as a deduction. A 30% tax rate is applied to the excess.
The Pay-As-You-Earn (PAYE) system of collection is in operation. The employers, who act as agents, deduct tax from employees' gross monthly emoluments. The tax so deducted must be remitted to the Inland Revenue Department by the 7th day of the month following the period for which the deduction was made. Any tax deducted and not paid within the time specified shall bear interest at the rate of 2% per month or part thereof for the period during which it remains unpaid.
Employees whose income was in excess of EC$60,000 are required to furnish annual income tax returns and attach certification from the employer by the end of March following the year of assessment.
All employees are also charged a National Reconstruction Levy (NRL) on income in excess of EC$1,000 per month at the rate of 3%.
The rate of tax on companies in Grenada is 30%.
Grenadian resident companies are liable to income tax on all sources of nonexempt income wherever arising. A company is regarded as resident in Grenada if its central management and control is located and exercised in Grenada or if it was incorporated in Grenada. A non-resident company is taxed on income of a branch carrying on a trade or business in Grenada, i.e. the income arises in Grenada.
The tax year or 'year of assessment' is a period 12 months commencing on 1 January in each year. Companies are assessed tax on their income that arises in the basis period. Where the company usually makes up its accounts for a period other than the calendar year, this period will be substituted for the calendar year. The company is expected to submit its tax return by the end of March or three months following the year of assessment and pay any balance of tax due. The company is required by law to make monthly advanced payments of income tax based on the results of the preceding year (estimated tax). Any balance of tax is due and payable when the return is filed.
CAPITAL GAINS TAX
There is no income tax on capital gains secured on the disposal of capital assets. However, there is a transfer property tax of 5% of the value of property sold with or without improvement.
Aliens' landholding tax: For foreign company buying into local company, the foreigner pays 15% and the local pays 10%.
Foreign buying into foreign: each pays 15%.
There is a 1% stamp duty charge.
BRANCH PROFITS TAX
Branches of non-resident corporation or companies doing business in Grenada are taxed on the profits arising in Grenada. The rate of tax is 30%.
National Insurance is payable on emoluments up to a maximum of EC$3,000 per month at rate of 4% from the employee (EC$120) and 5% from employer (EC$150). This compulsory contribution made both by employer and employee goes towards the provision of a pension at age 60 for women and 65 for men.
Stamp tax is paid on the gross income of businesses. Tax rates are as follows:
Gross annual income of over EC$30,000 but less than EC$100,000: 0.25%
Gross annual income exceeding EC$100,000: 0.5%
The charge shall not be less than EC$100 and is payable by 31 March of each year.
Common External Tariff (CET) and Customs Service Charge (CSC) are imposed.
CET: 5% to 40% on the CIF value of the landed price of goods purchased outside of CARICOM.
Property tax is ad valorem, i.e. the property is assessed at market value and a taxable rate is applied based on the land use classification.
Category Land rate % Building rate %
Agricultural 0.0 0.0
Amenity 0.1 0.1
Commercial 0.5 0.3
Hotel 0.3 0.02
Industrial 0.3 0.2
Institutional 0.1 0.1
Residential 0.1 0.15
Reserve 0.1 0.0
Waste 0.1 0.0
DETERMINATION OF TAXABLE INCOME
The chargeable income of a company is determined by deducting all non-capital disbursements and expenses wholly and exclusively incurred in acquiring the income from all taxable income brought into charge. Domestic and private expenses are not allowable. Special deductions include the following.
Capital allowances are granted for depreciation of equipment, plant and machinery and other assets used in the business at the following rates per annum:
Plant, machinery and equipment 10%
Air conditioning units, computers, elevators, ships, and other vessels 16.66%
Motor vehicles other than heavy vehicles 20%
Aircraft and equipment, heavy plant and machinery, public transport 25%
Stock and work-in-progress are valued at the lower of cost or net realisable value.
CAPITAL GAINS AND LOSSES
Capital gains are not taxed in Grenada.
Dividends are not taxed in Grenada.
Interest paid upon any money borrowed on capital employed in acquiring the income is deductible.
Losses sustained in a trade, profession or business carried on in the Island or through the ownership or occupation of land situated in the Island are allowed as expenses in arriving at the chargeable income of the person sustaining the loss. The loss should not be a capital loss. The loss is available to be set off against other income arising in the year of assessment and may be carried forward and deducted in ascertaining the assessable income of the next two years or until the assessed loss has been fully allowed, whichever is earlier.
The deduction shall not exceed one half of the assessable income of the subsequent years.
FOREIGN SOURCED INCOME
Where income arises outside Grenada and such income is derived from any act incidental to business carried on in Grenada, such income shall be included in the assessable income of the business in Grenada whether received in Grenada or not.
(a) branch or agency profits from business outside Grenada
(b) interest, royalties and rents outside Grenada.
There is full exemption from taxes on corporate profits for up to ten years. There is also exemption from customs duties (CET) and taxes (GCT) on articles of hotel equipment to equip and upgrade the hotel property, service vehicles, material for construction, repair, renovation or alteration to hotel properties.
There is full exemption from taxes on corporate profits for up to 15 years. There is also exemption from customs duties (CET) and taxes (GCT) on plant, machinery, equipment (including equipment for the transportation of goods), spare parts, raw materials and components.
There is relief from duties (CET) and taxes (GCT) on equipment.
FOREIGN TAX RELIEF
There is no foreign tax relief in Grenada.
Tax liability in a group basis is not permissible. The liability of each company within the group is determined separately.
RELATED PARTY TRANSACTIONS
Related party transactions which are carried out for considerations not at arm's length, intended to secure a benefit or tax advantage or to reduce the tax payable, are counteracted by the Comptroller who will take appropriate actions to negate this advantage.
Taxes at the rate of 15% are required to be deducted from payments to non-residents of interest or discounts, royalty, annuities or other periodic payments, rental, lease premium or license, management charge and commission or fee. The tax so deducted shall be paid to the Comptroller within seven days from the date of the payment to the payee.
There are no exchange controls in Grenada at this time. Foreign currency up to a maximum equivalent of EC$250,000 can be purchased from any of the commercial banks. Amounts in excess of this limit are subject to permission being obtained from the Ministry of Finance. This permission is generally not withheld and can be obtained within a short time period.
The General Consumption Tax (GCT) is a form of value added tax which was introduced in April 1995. GCT is levied on the importation and local sale of goods and some services. GCT on imported goods is at rates ranging from zero to 25% on CIF value plus CET. Goods originating in the Caribbean Community (CARICOM) area are at 10% on CIF only. Rates for the sale of goods are:
- 0-10% on goods produced locally
- 10% on telephone calls
- 8% on food and beverages served in hotels and restaurants
- 8% on occupancy of rooms in hotels and guest houses
- 5% on other services
GCT (General Consumption Tax) return is due by the 20th day of the ensuing month. Late payment attracts a fine of 2% per month.
Income Tax Rate
Corporate Tax Rate
Sales Tax / GCT Rate
Last Update: Nov 2010
ANTIGUA & BARBUDA
BOSNIA & HERZEGOVINA
BRITISH VIRGIN ISLANDS
CENTRAL AFRICAN REP.
CONGO, DEM. REPUBLIC
CONGO, REPUBLIC OF
ISLE OF MAN
PAPUA NEW GUINEA
TURKS AND CAICOS
UNITED ARAB EMIRATES
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