An island country in the Caribbean region, Grenada is surrounded by Trinidad and Tobago in the northwest, Venezuela in the northeast, and Saint Vincent and the Grenadines in the southwest. Owing to its production of spices, the country is famously called the “Island of Spice.” In addition to having a stunning natural landscape, Grenada boasts of a robust economic infrastructure. The country has a developing real estate market and offers attractive tax benefits to investors. All these factors make the Grenada Citizenship by Investment Program one of the strongest in the world.
In this article, we will take you through the taxes that individuals and companies need to pay in Grenada, how to obtain Grenada citizenship, and the benefits of Grenada citizenship by investment program.
Who has to pay taxes in Grenada?
Foreign investors with Grenada citizenship are not required to pay taxes in the country. Only when they purchase a property, register a yacht or a car, start a company, or earn any income in Grenada, are they obliged to pay Grenada taxes. In such circumstances, the rates and tax base are dependent on whether or not they are Grenada tax residents.
Who is required to pay Income Tax?
Corporations, trustees, sole traders, partners within partnerships and all employees who earn in excess of $3,000 monthly or $36,000 per annum. Please note that personal income up to 24,000 Eastern Caribbean Dollars, that has been earned in Grenada has a tax rate of 10 percent. Any amount over this is taxed at 30 percent. Whereas for non-residents, the tax on income earned in Grenada is charged at 15 percent. In addition to this, there is no tax on personal foreign income or capital gains.
Who is a Grenada Tax Resident?
Tax Resident – An individual spending more than 183 days in Grenada is a tax resident of the country. A company can also obtain tax residency in Grenada if it has been registered in the country or the head office of the company is in Grenada. For individuals, Grenada tax residency is most effective if you have already renounced your original citizenship. Dual citizenship creates the risk you may still be liable for tax in another country.
Non-Tax Residents – An individual not living in Grenada or a company not registered in the country is considered as non-tax resident. If you are a non-tax resident, then higher tax rates might be applicable. But that is only if the foreign investor or the company receives any income from sources in Grenada
Grenada Taxes for Individuals
Individuals in Grenada don’t have to pay capital gains tax, inheritance tax, or global income tax. The primary tax that people need to bear in Grenada is the gross income tax. For non-residents, withholding taxes are levied on dividends and other payments.
Income Tax – Individuals need to pay income tax on income that is received in the country. For instance, salaries and business income received within the country. Grenada residents must also pay income taxes on interest, royalties, rent, and other income, whereas non-residents need to pay all these in their source country.
For residents and non-residents, a similar Grenada tax rate is applicable.
- 10 percent on the first EC$24,000 ($8,880)
- 28 percent on the amount above EC$24,000
Salary contribution – Residents and non-residents need to pay 5 percent of their salary as social contribution
Withholding Tax – The withholding tax rate is fixed at 15 percent in Grenada. This tax is applicable when income such as dividends is paid by a Grenada resident to a non-resident. In case dividends, royalties, or interests are paid to Grenada tax residents, no withholding tax is charged.
Grenada Taxes for Legal Entities
The most common companies registered in Grenada are Limited Liability Company (LLC) and International Business Company (IBC). Grenada companies must pay tax on net income, VAT, social security contributions from salaries, and a withholding tax.
Corporate Tax – The corporate tax in Grenada is fixed at 28 percent. For resident companies in Grenada, the tax base is the profit from all transactions. In the case of non-resident companies, the tax is only paid on the profit earned from sources in Grenada.
Value Added Tax (VAT) – The VAT in Grenada is fixed at 15 percent. But there are some exemptions:
- Mobile operators need to pay 20 percent VAT
- Hotels and diving companies need to pay 10 percent VAT
- Companies involved in activities like supplying staple food or water need to pay 0 percent
Companies generally pay VAT with an annual taxable income of a minimum of EC$300,000 ($111,000).
Social Contributions – Social contributions amount to 4 percent of an employee’s salary.
Withholding Tax – The withholding tax is fixed at 15 percent on dividends, interest, and royalties to a non-resident company in Grenada.
Grenada Taxes for Properties
Transfer Tax – If you sell real estate in Grenada, you must pay a transfer tax. Grenadian citizens must pay a transfer tax of 5 percent, whereas foreigners need to pay a transfer tax of 15 percent.
Moreover, Grenadian passport holders don’t have to pay additional taxes while buying property there. But foreign investors, on the other hand, need to pay 10 percent of the object’s value to own a license for purchasing property. This is known as an Alien Landholding Licence. However, this is not applicable to foreign investors making a real estate investment under Grenada Citizenship by Investment.
Annual Property Tax – The annual property tax is up to 0.8 percent of the property’s market value in Grenada. Property taxes are divided into land tax and building tax.
Grenada Property Tax Rates
The market value of real estate in Grenada depends on various factors like the location of the property, the price of the land in the area, the size and type of property, and the condition of the property.
Discover valuable insights on Buying Grenada Real Estate
Grenada Tax Treaties
Grenada has Double Taxation Treaties (DTT) with the United Kingdom and Countries of the Caribbean Community (CARICOM). If a Grenadian Tax Resident earns income in one of these countries, no tax must be paid in full amount to any government.
<H3> Exchange of Tax Information
Under CRS and FATCA, Grenada shares tax information with other countries.
CRS – Developed by the Organization for Economic Cooperation and Development, CRS is a standard for the international exchange of account information between tax authorities. Over 100 countries like the UK, Australia, and Canada use the CRS system to avoid tax evasion and money laundering.
Under CRS, the following information is shared by Grenada
- Name of the taxpayer, TIN, date and place of birth
- Account number
- Account balance
- Data on capital gains
- A name and identification number of the financial institution
FATCA –The Foreign Account Tax Compliance Act was passed in 2010 in the United States to prevent American citizens and residents from avoiding paying taxes.
Under FATCA, Grenada shares information to the US Internal Revenue Service on accounts and assets that exceed $50,000. Please note that the data is only shared of:
- US citizens
- US residents – Green card holders
- US tax residents
- US companies
- Organizations with owners in the USA
Grenada Citizenship by Investment Program
The Grenada Citizenship by Investment Program is one of the most lucrative CBI programs in the world. Under the Citizenship by Investment Program, foreign investors can obtain Citizenship of Grenada in return for economic investment in the country.
Grenada Citizenship Eligibility
To obtain Grenadian citizenship, the applicant must fulfill the following criteria:
- Be over the age of 18
- Be in good health condition
- Hold no criminal record
- Pass detailed background checks
- Make the qualifying investment
Grenada Citizenship – Investment Options
There are two investment options through which you can obtain a Grenada passport.
Donation: You must make a non-refundable contribution to the National Transformation Fund (NTF). This fund has been developed by the Grenada government to attract foreign investments in the country to contribute to Grenada’s economy.
NTF | Single Applicant | Family Up to 4 | Additional Dependent | Additional Daependent Parent Under 55 | Additional Dependent Sibling |
Minimum Donation | $150,000 | $200,000 | +$25,000 each | +$50,000 each | +$75,000 each |
Application Fee | $1,500 per person | ||||
Due Diligence Fee | $5,000 for each family member aged 17 or over | ||||
Processing Fee | $1,500 per person aged 18 or over $500 per person under 18 | ||||
Mandatory Interview Fee | $1,000 per applicant aged 17 and over | ||||
Real Estate: Foreign investors can also obtain Grenada citizenship in return for an investment in real estate. The properties must have been previously approved by the Government and can be resold after five years.
Real Estate | Family Up to 4 | Additional Dependent | Additional Dependent Parent Under 55 | Additional Dependent Sibling |
Minimum Investment Minimum Investment | OPTION 1: $220,000 in shares OPTION 2: $350,000 as sole owner | |||
Government Fee | $50,000 | +25,000 each | +50,000 each | +75,000 each |
Application Fee | $1,500 per person | |||
Due Diligence Fee | $5,000 for each family member aged 17 or over | |||
Processing Fee | $1,500 per person aged 18 or over $500 per person under 18 | |||
Mandatory Interview Fee | $1,000 per applicant aged 17 and over | |||
Take a look at our Grenada Citizenship by Investment Ultimate Guide
Grenada Citizenship by Investment Program – Benefits
- You can obtain a Grenada passport for your whole family
- Grenada is a tax-friendly nation and offers great benefits
- There are no residency requirements
- The Grenada Citizenship process is fairly quick
- You will have the opportunity to apply for the USA E2 visa after being a resident of Grenada for three years
- You have access to over 140 countries Grenada passport visa free countries
Frequently Asked Questions about Grenada Taxes
Who is required to pay income tax in Grenada?
Corporations, trustees, sole traders, partners within partnerships, and all employees who earn in excess of $3,000 monthly or $36,000 per annum are required to pay gross income tax in Grenada.
How is income tax calculated in Grenada?
For personal income up to XCD (Eastern Caribbean Dollar) 24,000, you need to pay tax at a rate of 10 percent in Grenada. Any amount over this is taxed at 30 percent. For non-residents, a fixed 15 percent rate of tax is applicable on income earned in Grenada. Additionally, neither personal foreign income nor capital gains are taxed.
Are there any tax incentives or exemptions available in Grenada?
Yes, Grenada is tax-free regarding capital gains and inheritance. The tax levied by Grenada’s inland revenue division on income only applies to global income for individuals. Any pension payable to a former employee or the dependent or trustee of a former employee is exempt from tax if the income is received through an approved pension fund.
Is Grenada a tax-friendly nation?
Since the Grenada tax system doesn’t include capital gains, inheritance, or global income for individuals, many label the country the ‘Grenada tax haven.’
What is the tax structure in Grenada?
Depending on the income, there are two Grenada income tax rates, 10 percent and 28 percent. The corporate tax and standard VAT rate are fixed at 28 percent and 15 percent respectively. The annual property tax is up to 0.8 percent of the market property value.
What are the key deadlines for tax filing and payment in Grenada?
According to the Grenada Income Tax Act, below are the key deadlines that you need to keep in mind:
- Property Tax: 5 percent rebate if paid before 30 June. After 29 June, a 20 percent fine shall be applicable on the unpaid amount.
- Annual Stamp Tax:31 March (filing date). This can be paid in nine monthly installments from April in the filing year.
- Personal Income Tax: 90 Days after Financial Year
- Corporate Income Tax: 90 Days after Financial Year
- VAT: 20th day of each month
- PAYE: 7th day of each month
Does Grenada have a tax treaty with the US?
Besides FACTA, the US does not have a tax treaty with Grenada.
What is the non-resident tax in Grenada?
The is no specific non-resident tax levied in Grenada. Grenadian taxes apply to residents. If a non-resident of Grenada earns income in the country, such as a property or business owner, they will be liable to pay Grenada taxes.
How do I file my income tax returns in Grenada?
To file your income tax returns in Grenada:
- Collect all relevant financial documents, including Grenada income statements, deductions, and receipts.
- Calculate your Grenada tax liability or refund based on the information provided in the relevant tax return forms.
- Submit the relevant Grenada tax return forms according to filing deadlines with your tax identification number (TIN to the Inland Revenue Division either electronically or in person.
What are the VAT rates in Grenada, and what items are exempt?
Most goods and services in Grenada are subject to 15 percent VAT. Hotels and diving operations are charged a lower VAT rate of 10 percent. Specific technological and creative equipment are VAT-exempt for 12 months.
