Obtaining a second passport is an effective solution to many problems (from simplifying the procedure for opening accounts in European banks to elevating status of a person). The Dominica passport program is one of 5 Caribbean programs that allow high-net-worth and ultra-high-net-worth individuals who are in search of the best chances to achieve the set goals and free themselves from many limitations. Among other things, this country is a tax haven. Therefore, it can be viewed as the source of business opportunities, being characterized by a friendly taxation system.
CITIZENSHIP-BY-INVESTMENTS PRESENTATION
At a registration stage, a tax resident of Dominica resides within the state for a minimum period of 183 days on an annual basis. Residents of this country should pay taxes on global income. Non-residents pay a personal income tax to the Inland Revenue Division. It is commonly based on their capital gains.
Income tax rate, important for personal income tax, is based on a progressive scale:
Taxable income is a profit derived from capital gains, royalties, interests, bonuses, etc.
The main requirement in obtaining a taxpayer status of an individual is a willingness to pay the minimum amount of income tax to the state treasury on an annual basis. Referring to the results of preliminary assessments, the head of the government noted that the total amount of funds additionally collected from foreign investors in value terms would be greater than the total amount of taxes levied on profits (in 2016 – $34 million).
For a long time, the country’s government was in search of the best way to simplify the taxation system and lower the tax rate. By now, non-residents should pay their taxes only if their income is more than $30,000. Also, an option of raising the taxable minimum to XCD 20,000 is considered.
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.
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.
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.
There is no inheritance tax in Dominica, but gifts are subject to property transfer tax in some cases. Sometimes it is required to pay 1% of the transferred property cost to the financial guarantee fund, 2.5% of the court fee, and 3% of the attorney’s fee, on which a 15% VAT is payable. A noteworthy detail is that inheritance laws are biased against women in this country. Even having a husband’s will, the wife is not entitled to his property.
Wage-earners pay 6% of their income to the social security fund monthly.
The annual declarations are submitted by March 31 of the year, which follows the reporting year. If you miss the deadline for submitting documents and tax arrears, a penalty of 5% of the overall amount owed is imposed, plus interest, versus a late payment penalty of 0.5% per month, plus interest. The monthly late payment interest fee is 1% or part thereof for the period during which it remains unpaid.
Dominica’s passport program, launched in 1991, is one of the oldest in the world. Today, investment funds coming from foreigners are used in the public and private sectors of the country’s economy.
Investors wishing to apply for Dominica citizenship are offered two investment options:
In addition, the processing fees and due diligence fees shall be paid. There are also Certificate of Naturalisation fees, expedited passport issuance fees, and stamp duty.
The Dominica passport gives the following benefits:
Dependent family members may also have the right to obtain this citizenship with the investor with all benefits to be accrued to citizens of the country. However, the cost of a contribution is determined by the number of dependents included. The application process is fully discrete and takes 3-5 months. Citizens of Iran, Syria, Yemen are eligible for participation.
Thus, Dominica offers good opportunities for international business people wishing to obtain a second passport and, at the same time, minimize their tax burden.
Dominican-source income is subject to tax, but foreign-source income is generally not. There are no inheritance and property taxes.
EU added Dominica to the list of the top tax havens for millionaires around the world.
There is no property tax in Dominica. Instead, this country has a municipal tax levied on properties located in Canefield and Roseau.
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