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Grenada’s tax system and its peculiarities

Kristina Kurkuliak
19 November 2018

Grenada’s passport program attracts investors by a relatively low cost of participation. It does not only give a possibility to create “a reserve airfield” outside your native country, but also provides tools for solving some more pragmatic tasks. If you plan to use Grenada’s passport to reduce the tax burden, this article is just for you.

Taxation of individuals and legal entities

To be a tax resident of Grenada, it is required to stay in the country for at least 183 days throughout the year. Tax residents and individuals who are not tax residents of Grenada pay tax on the income received within the island. The tax rate for residents is 30%, for non-residents – 15%. The non-taxable minimum income of individuals is 60,000 East Caribbean Dollars (XCD). All individuals are required to file tax declarations. Employees pay 4% of their earnings (but not more than 5,000 XSD) to the social security fund on a monthly basis.

There is no gift, inheritance, capital gains and world income tax in Grenada.

Legal entities pay 30% tax on their income. Keith Mitchell, Prime Minister of Grenada, made announcement about the reduction of taxes during the recent meeting on adopted budget. Corporate income tax rate would be decrease by 5% and would be 25%, inhabitant tax on income would be also decreased by 5%. A large-scale tax reform should be implemented by June 2018.

Special aspects of VAT payment

Value-added tax is imposed on transactions of the sale of goods and services in the island, imports of goods to Grenada. The generally accepted VAT rate is 15%. There are exceptions: 10% for the tourism industry, 20% for the telecommunications industry. In some cases, a zero rate can be applied.
How to register with tax authorities and get an tax payer ID? The total annual cost of supplies should exceed 120,000 XSD. Voluntary registration is only possible with the consent of the respective authorities.
Declarations are submitted and tax payments are made no later than the 20th day of each calendar month.

Other taxes in Grenada

Property tax. The amount of tax is determined by the market value of an item. It varies between 0-0.5% depending on the intended use of the property. Owners of the residential property in which they live are exempted from paying tax on this item (this benefit is applicable only to one property object possessed by a taxpayer).
Inheritance tax. Citizens of Grenada do not pay inheritance tax, but in some cases, gifts are subject to transfer tax. In case of transfer of ownership in real property, a tax is levied: 5% for residents, 15% for non-residents. The tax is paid by the seller if the value of the item exceeds 20,000 XCD. If the property is transferred based on a Deed of Transfer, the tax will be paid on the value of over 150,000 XCD. Buyers who are not residents of Grenada need to additionally receive a purchase permit (10% of the value of real property).

Principles of tax reporting

Declarations are submitted by March 31 of the current year. All tax debts must be paid before filing a tax declaration. If there is an outstanding tax debt, an interest fee of 2% is charged on a monthly basis.

Advantages of the Grenada passport

Grenada attracts businessmen due to low tax rates and the absence of taxes customary for the Europeans (inheritance, global income, gifts tax). Moreover, as a holder of the passport of Grenada, you can:

Statistics and conditions of the Grenada citizenship by investment program

Grenada’s citizenship by investment program has been operating since 1997. In 2001, it was suspended, and re-launched in 2013. In total, 1,300 applications from foreign investors have been approved by the authorities.

The popularity of the Grenada’s passport program is growing every year. The statistics for 2017 attests to this fact: the number of applications increased by 108% compared to the previous year, and the percentage of refusals decreased from 13% to 8%. The total amount of investment inflow into the economy in 2017 was more than $130 million.

The participants of the program are offered two investment options:

Issuance of passports for all family members may take 3-5 months. It is not required to visit the country to file documents, as well as to live on the islands after receiving passports. The application process is completely confidential, so your “new home” will not be reported to anyone.
After the grant of the Caribbean citizenship, you can open accounts in reputable banks, carry out tax planning, make tourist and business trips around the world without visas. The passport of Grenada is the way to obtaining an investor visa to the United States.

Comparing Caribbean CBI programs

Interested in expanding your personal and economic freedoms by investing in a Grenadian passport? Our qualified experts will consult you on your specific case, calculate the precise cost, and provide advice at every stage of the passport acquisition process.
We also urge our clients to compare conditions of the various CBI programs to make up their minds and opt for what suits them best. Speaking of Caribbean nations, here are some more reasons to strongly consider one of the countries in the region as your second home:

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