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Tax system of Dominica and its advantages. What should you know before applying for citizenship?

Kemal Nicholson
13 August 2021

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.

Taxes of Dominica

Can’t figure out which passport of the 5 Caribbean countries suits you best?

This guide will walk you through things to keep in mind, highlighting the most important advantages and differences of each country!

Taxation of individuals: personal income tax

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.

Current income tax rates

Income tax rate, important for personal income tax, is based on a progressive scale:

  1. first $30,000 of taxable income are not taxed;
  2. $30,001 to 50,000 – the following $20,000 of taxable income are subject to 15% income tax;
  3. $50,001 to 80,000 – the following $30,000 of tacable income are subject to 25% income tax;
  4. every dollar over 80,001 are subject to 35% income tax.

Taxable income is a profit derived from capital gains, royalties, interests, bonuses, etc.

In the summer of 2017, the government announced possible changes in the requirements to obtaining tax residency. The Prime Minister of Dominica, Roosevelt Skerrit, said that changes would be made in a mid-term perspective. Citizens who have received a passport by investment would be able to become tax residents of Dominica and receive a taxpayer ID without the need to stay in the country for 183 days a year.

How to get a taxpayer status

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.

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Other types of fees and Dominica tax

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.

When do you need to file tax returns?

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.

How to apply for Dominica citizenship by investment?

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:

  1. Donation to the government fund. A standard minimum investment per applicant is $100,000. For a spouse – minimum $50,000; for a family of four people – minimum $175,000. In addition to this, a government fee of $25,000 should be paid.
  2. Investment in real property. The minimum amount of investment is $200,000. An applicant may choose from the projects approved by the government.

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.

Key benefits of Dominica passport

The Dominica passport gives the following benefits:

  1. visa-free travel to 140+ countries (including Singapore and Hong Kong);
  2. possibility to obtain long-term visas to the USA and Canada;
  3. minimal taxation;
  4. creation of a “reserve airfield” outside of the home country;
  5. new sources for business;
  6. keeping financial assets in a stable currency in reliable banks.

Can your family members join you?

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.

Interested in more detailed information about the Dominica CBI program? Feel free to visit our site and contact our company!
  1. We offer free consultations, understanding how important it is for the client to make the only correct decision.
  2. We work only in the field of investment immigration, integrating gained experience into the investor’s goal.
  3. We work only with official programs of the European Union and Caribbean countries.
  4. Before signing the contract, we inform our clients about all additional fees and expenses.
  5. We conduct a screening to assess the investor’s chances of obtaining the desired citizenship.
  6. We oversee the process at each stage, and we are liable for work exclusively towards the result.
  7. We address your needs to the maximum.
  8. We are in touch 24/7.

Our mission statement is linked to the quick and precise execution of the client’s requirements to help them unlock their freedom.

Frequently Asked Questions

Is Dominica tax-free?

Dominican-source income is subject to tax, but foreign-source income is generally not. There are no inheritance and property taxes.

Is Dominica a tax haven?

EU added Dominica to the list of the top tax havens for millionaires around the world.

Does Dominica have property tax?

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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