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Taxation in Grenada
 
 
 

General

For domestic companies, corporate taxes are levied, at the time of writing, on net profits of companies at a rate of 30%. In the case of sole proprietorships there is a EC$60,000 exemption. A debt service levy is payable on salaries over $12,000 per year at a rate of 10%.

Offshore companies are exempt from corporate taxation.

Withholding Tax

Withholding tax of 15% (at the time of writing) is payable on the following items:

• salaries;
• interest (except from bank deposits);
• discounts;
• rents;
• lease premiums;
• license charges;
• royalties;
• management of charge;
• commissions;
• fees;
• royalties on other payments.

Value Added Tax (VAT)

Grenada has announced the imposition of a VAT as of January 1, 2010, to replace the existing General Consumption Tax which applies at rates of 5%, 8% and 10% to most services.

Double Tax Treaties

Grenada has a double tax avoidance agreement with the United Kingdom dating from 1949, with an amending protocol dated 1968.

By virtue of the UK's double tax avoidance agreement with South Africa, Grenada has some double tax avoidance arrangements with that country. Taxes payable under the laws of Grenada, whether directly or by deduction on profits or income from sources within Grenada, shall be allowed as a credit against any UK tax computed by reference to the same profits or income by reference to which Grenada tax is computed.

In the case where a resident company of Grenada which pays a dividend to a resident company in the UK who controls directly or indirectly at least 10% of the voting power in the first-mentioned company, the credit shall take into account the taxes paid in Grenada by that first-mentioned company in respect of the profits out of which such dividend is paid.

The Caricom Double Taxation Agreement applies within Caricom i.e. Barbados, Guyana, Jamaica and Trinidad & Tobago and the less developed Caricom countries, being Antigua, Belize, Dominica, Grenada, Montserrat, St Lucia, St Vincent & the Grenadines, St Kitts & Nevis, Nevis and Anguilla. The treaty largely removes fiscal barriers within Caricom and provides for income arising in one Caricom territory for a resident of another to be taxed only in the source country. The Treaty also exempts dividends payable by a company resident in one Caricom territory from taxation both in the country in which the income arises but also in the country in which the shareholder is resident.

Grenada also has a Tax Information Exchange Agreement with the United States within Caricom's programme for such treaties under the Caribbean Basin Initiative. As a result, Grenada is considered to be part of the North American area for purposes of claiming deductions for expenses incurred in connection with a convention beginning on or after the 1987.

The tax information exchange agreement, which Grenada signed with the USA in 1983, in accordance with the Caribbean Basin Economic Recovery Act, provides for the exchange of tax information between these two countries. Except as provided by provisions of the Exchange of Information Agreement, no information in any form by any person may be divulged to any person or governmental authority whether within or inside Grenada.

 

 
 

 



 


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