Taxation of legal entities
Legal entities that are tax residents have to pay global income tax. Non-residents pay taxes only on the profits received within the state’s territory. The tax rate is 15%. Nothing is imposed on capital gains and dividends received in Dominica.
Offshore companies registered in the state receive 20-year tax holidays and do not pay income, profits, inheritance, wealth, and other taxes. Instead, such companies pay a registration fee and government levy annually.
VAT payment terms and value-added tax
Value-added tax is imposed on the sale of goods, rendering services on the island, and importing goods to Dominica. The VAT rate is 15%. However, accommodations and diving centers pay a reduced tax rate of 10%. It is also important to note that certain goods and services have a zero rate.
How to register for VAT
Registration for VAT payment and getting a taxpayer ID is required if the annual amount of supplies exceeds the threshold of $250,000. In addition, persons engaged in leasing commercial real estate and rendering hotel accommodation services are required to register with tax authorities if the total amount of supplies exceeds the threshold of XCD 60,000.
There is no property tax in Dominica. However, there is a municipal tax levied on properties located in Canefield and Roseau. On average, its tax rate is 1.27% of the market value of the real estate item.
The corporate income tax rate is 25%. Dominica has no surtax. The same goes for an alternative minimum tax. The Dominica taxes of this kind must be paid within the period of every three months of the company’s fiscal year.