Grenada Taxes: The Ultimate Guide 2025

Is Grenada a Tax Haven?

Grenada is often regarded as a tax haven due to its favorable tax policies, particularly for foreign-sourced income. Individuals earning income outside Grenada are exempt from personal income tax on that income, making the country attractive to expatriates and digital nomads. For domestic income, Grenada employs a progressive tax system, with rates ranging from 10% to 28%. As an added benefit, the absence of capital gains, inheritance, and wealth taxes enhances its appeal as a tax-friendly jurisdiction. 

While Grenada offers significant tax advantages, it maintains transparency and regulatory standards to prevent illicit financial activities. Therefore, it is not classified as a traditional tax haven characterized by secrecy and lack of cooperation with international tax authorities.

Who Pays Taxes in Grenada?

The taxation system depends on whether an individual or entity qualifies as a tax resident. A tax resident is someone who spends more than 183 days per year in Grenada, while companies can achieve tax residency if they are incorporated in Grenada or managed from there. Non-residents, including foreign entities, are subject to higher tax rates, but these apply only to income sourced from Grenada.

Foreigners who obtained Grenadian citizenship by investment are not automatically required to pay taxes in the country. Tax obligations arise only when individuals or companies acquire property, register assets such as yachts or cars, establish businesses, or earn income within Grenada.

Grenada Tax Residency Explained

Grenada has a relatively simple tax system compared to other countries in the Caribbean. The tax system is based on the principle of territoriality, which means that only income earned within Grenada is subject to taxation. This means that if you are a foreign national living and working in Grenada, you will only pay taxes on the income you earn within the country. The following guidelines apply to determining tax residency in Grenada:

1. Resident Individual: An individual is considered a resident for tax purposes in Grenada if they meet any of the following conditions:

• They spend 183 days or more in Grenada during a calendar year.
• They spent an aggregate of 122 days or more in Grenada during each of the three consecutive calendar years.
• They are present in Grenada for an average of at least 91 days per year over a four-year period.

2. Non-Resident Individual: If an individual does not meet any of the criteria mentioned above, they are generally considered a non-resident for tax purposes in Grenada. Non-residents are typically subject to tax on their Grenadian-source income only.

In Grenada, corporate tax residency is determined by a company's incorporation status and the location of its central management and control. A company is considered a tax resident if it is incorporated in Grenada or if its central management and control are exercised within the country. Resident companies are subject to a corporate tax rate of 28% on their worldwide income. In contrast, non-resident companies are taxed only on income derived from Grenadian sources and are exempt from tax on foreign-sourced income. 

Grenada Tax Benefits

Grenada's tax system offers several benefits for individuals and businesses. Some of the key advantages include:

Low Personal Income Tax Rates

Grenada has a progressive income tax system with relatively low tax rates. The highest marginal tax rate for individuals is 28%. In addition, there is no tax on foreign income or wealth, making it an attractive option for expatriates.

Tax Exemptions and Deductions

Grenada provides various tax exemptions and deductions to individuals and businesses. For instance, individuals may benefit from exemptions on certain types of income, such as income from pensions, interest, dividends, and capital gains. Businesses can also claim deductions for certain expenses incurred in producing income.

No Wealth or Inheritance Taxes

Grenada does not levy any wealth or inheritance taxes, which can be advantageous for individuals and families with significant assets. This can help individuals preserve their wealth and facilitate intergenerational wealth transfers.

Attractive Corporate Tax Regime

Grenada offers a competitive corporate tax regime, which can be appealing to businesses. The corporate income tax rate is set at a flat rate of 28%. On top of that, there are no capital gains taxes or withholding taxes on dividends, interest, or royalties.

Territorial Tax System

Grenada operates on a territorial tax system, which means that only income derived within the country is subject to taxation. This can be advantageous for businesses engaged in international activities, as they may not be taxed on income earned outside of Grenada.

Tax Treaties

Grenada has entered into double tax treaties with some countries, including the United Kingdom, and several other Caribbean nations. These treaties aim to prevent double taxation and provide relief for businesses and individuals operating in multiple jurisdictions.

Investor-Friendly Environment

Grenada has implemented various initiatives to attract foreign investment. These include the Citizenship by Investment program, which offers citizenship and various benefits to qualifying investors. The government's focus on creating a favorable business climate can encourage investment and stimulate economic growth.

Grenada Taxes for Individuals

Individuals are subject to Grenada income tax on earnings sourced within the country. Notably, there are no taxes on capital gains, inheritance, or global income.

Income Tax Rates

Grenada operates a progressive personal income tax system, which means that individuals are taxed at different rates depending on their income level. The following are the income tax rates for individuals in Grenada:

• First $36,000 is tax-exempt
• The next $24,000 is taxed at 10%
• Any amount over that (after the first $60,000) is taxed at 28%.

Additionally, Grenada operates a National Insurance Scheme (NIS) that provides social security benefits to eligible individuals. The contributions to the NIS are primarily made by employers and employees and are calculated based on a percentage of the employee's earnings. In general, the rate is 5%. The contributions go towards funding benefits such as pensions, unemployment benefits, and healthcare.

As for withholding tax, Grenada may impose it on certain types of income, such as interest, dividends, royalties, or payments to non-residents. The tax rate is 15%. No withholding tax is levied on interest, dividends, and royalties paid to Grenada tax residents. 

Summary of Individual Taxes

*EC$ represents the Eastern Caribbean Dollar, with an exchange rate of 1 USD equaling EC$ 2.67 at the moment of writing.

Grenada Taxes for Legal Entities

Companies operating in Grenada are subject to several taxes, including corporate tax, VAT, social security contributions, and withholding tax.

Grenada does not have a separate capital gains tax. Capital gains are generally treated as part of a company's taxable income and subject to the corporate income tax rate.

Corporate Tax

Here are Grenada corporate tax rates on the profits earned by resident and non-resident companies: 

• 28% on net income for resident companies.
• Non-resident companies are taxed only on income sourced within Grenada.

Value Added Tax (VAT)

Grenada operates a value-added tax system that applies to the supply of goods and services within the country. The standard VAT rate is 15%. However, certain goods and services may be exempt or subject to reduced rates. Legal entities are generally required to register for VAT if their annual taxable turnover exceeds a certain threshold. The turnover threshold for mandatory registration is EC$300,000 per year. However, businesses with a lower turnover may voluntarily register for VAT.

Social Contributions

Employers in Grenada are required to contribute 4% of an employee’s salary as part of the social security obligations. This contribution is directed towards social benefits, ensuring financial support for employees in cases of retirement, disability, or other qualifying conditions.

Withholding Tax

Grenada imposes withholding taxes on certain types of payments made by legal entities, such as 15% on dividends, interest, and royalties paid to non-resident companies. Please find the table for legal entities taxes below:

Summary of Legal Entity Taxes

These tax structures are designed to support Grenada's economic framework while providing clarity for both individuals and businesses operating within the country.

Grenada Property Taxes

Grenada property tax is a charge levied by the government on real estate. The property is assessed at market value, and a taxable rate based on the land use classification is applied. The following factors are considered during valuation: 

• Location
• Land prices in the neighborhood
• The area's development potential and land use
• Land type (quality and nature of the soil)
• Land size and other relevant factors
• The state, quality, and age of the building(s)

The property owner, as well as occupants of buildings on extended family land, must pay the tax. Property tenants are also required to pay property tax if an arrangement is made in the lease agreement. 

Each property type is subject to distinct rates, with separate rates applied to the building and the land. Below are the applicable rates:

Property transfer refers to any transfer of property, whether by sale, exchange, gift, or other disposition. Tax payable on the transfer of property is as below:

The transfer tax for companies is between 5% and 15%. Plus, 10% is applicable for a land license when buying real estate. There is also a stamp duty of 1%.

Grenada Tax Treaties

Grenada has established Double Taxation Agreements (DTAs) to prevent individuals and businesses from being taxed on the same income in several jurisdictions. These agreements are designed to facilitate international trade and investment by clarifying tax obligations and providing relief from double taxation.

One of Grenada's notable DTAs is with the United Kingdom. This agreement outlines the tax responsibilities for residents of both countries, ensuring that income is not taxed twice. It has been in effect since 1949, with amendments made in 1968. 

Besides, Grenada has DTAs with member states of the Caribbean Community (CARICOM), such as Barbados, Trinidad and Tobago, and Jamaica, promoting economic integration and cooperation within the Caribbean region.

These DTAs provide mechanisms for tax credits or exemptions, reducing the overall tax burden for individuals and businesses operating across borders. By preventing double taxation, these agreements make Grenada a more attractive destination for foreign investors. They also define which country has taxing rights over specific types of income, reducing the risk of legal disputes and ensuring compliance.

To benefit from Grenada's DTAs, taxpayers typically need to establish residency in one of the contracting countries, often through a tax residency certificate. They must ensure the income in question qualifies for relief under the specific DTA and provide necessary forms and evidence to the relevant tax authorities to claim treaty benefits.

On a separate note, Grenada does not have a DTA with the United States as well as most other countries. Therefore, such citizens earning income in Grenada should be aware of potential double taxation and may need to consult tax professionals to navigate their obligations effectively.

Does Grenada exchange tax information with other countries?

Yes, Grenada actively exchanges tax information with other countries to promote transparency and combat tax evasion. The country participates in international frameworks such as the Common Reporting Standard and the Foreign Account Tax Compliance Act. 

Common Reporting Standard (CRS)

The CRS, developed by the Organisation for Economic Co-operation and Development (OECD), enables the automatic exchange of financial account information between tax authorities globally. Grenada adopted the CRS and began reporting in 2018. This means Grenada shares financial account details with over 100 countries, including key partners like the UK, Canada, and Australia.

Foreign Account Tax Compliance Act (FATCA)

FATCA, a U.S. initiative, is designed to prevent tax evasion by U.S. citizens and residents who hold financial accounts overseas. Grenada signed a FATCA agreement with the United States in 2016. Under this agreement, Grenadian financial institutions are required to report specific details about U.S. account holders to the Internal Revenue Service (IRS).

Information Shared

Through these frameworks, Grenada exchanges information such as:

• Account balances
• Income earned on accounts (e.g., interest, dividends)
• Identifying details of account holders (e.g., name, address, tax identification number)

Grenada’s collaboration with CRS and FATCA strengthens global tax compliance, enhances trust between nations, and reduces opportunities for tax evasion. These efforts highlight Grenada’s dedication to maintaining a transparent and reputable financial system.

Grenada Tax Rates vs other Caribbean Countries

Caribbean nations offer diverse tax regimes, particularly for individuals and businesses considering CBI programs. Below is a comparison of key tax rates across five prominent Caribbean countries:

These tax structures highlight the fiscal landscapes of each country, aiding individuals and businesses in making informed decisions regarding investment and residency in the Caribbean.

Grenada CBI Program for Tax Optimization

Grenada Citizenship by Investment (CBI) program is a powerful tool for investors seeking to optimize their tax liabilities while securing second citizenship, especially for US citizens. The program provides significant tax benefits and flexible requirements, making it an attractive choice for high-net-worth individuals. Key tax advantages include:

• No Tax on Foreign Income. Grenada does not impose taxes on income earned outside its jurisdiction, allowing investors to retain more of their global earnings. 
• Absence of Wealth, Inheritance, and Capital Gains Taxes. The country does not levy taxes on personal wealth, inheritances, or capital gains, facilitating efficient wealth management and succession planning. 
• No Residency Requirement for Tax Purposes. Investors are not obligated to reside in Grenada to benefit from its tax regime, providing flexibility in personal and business affairs. 

In order to apply for economic citizenship through making an investment in Grenada, applicants must be at least 18 years old and have no criminal record, as confirmed through a comprehensive background check. They must be in good health and willing to undergo a medical examination. In general, the requirements for Grenada CBI program are straightforward and designed to attract reputable investors. 

The program provides two primary investment options:

1. National Transformation Fund (NTF) Contribution. A non-refundable donation of at least USD 235,000 for a single applicant, which supports Grenada's economic development projects. 
2. Real Estate Investment. A minimum investment of USD 270,000 in a government-approved real estate project, with a required holding period of five years. 

Applicants can include dependents such as a spouse, children under 30, parents, grandparents, and unmarried siblings over 18 without children. The application process typically takes 3-4 months, and Grenada permits dual citizenship, allowing investors to retain their original nationality.

FAQ about Grenada Taxes

What are the Tax Benefits of Grenada Citizenship?

Grenada offers significant tax benefits to its citizens, including no taxes on worldwide income, capital gains, wealth, or inheritance, making it ideal for individuals with global income sources. The absence of Grenada capital gains tax and inheritance taxes ensures efficient wealth management and transfer. Additionally, Grenada’s competitive corporate tax rates and tax treaties with various countries provide further tax relief and prevent double taxation. These advantages, combined with no wealth tax, make Grenada an attractive option for individuals seeking citizenship with minimal tax burdens.

What is the Property Tax Rate in Grenada?

Grenada's property tax system is based on market value assessments, with rates varying by land use classification. For residential properties, the land rate is 0.2% and the building rate is 0.3%, while commercial properties are taxed at 0.5% for land and 0.3% for buildings. Agricultural land is exempt from property taxes. Hotel properties are taxed at 0.3% for land and 0.02% for buildings, and industrial properties are taxed at 0.3% for land and 0.2% for buildings. Property transfer tax rates depend on the taxpayer's status: Grenadian citizens pay 0% when purchasing and 5% when selling, while non-citizens pay 10% to purchase and 15% to sell. Companies face transfer tax rates of 5% to 15%, with an additional 10% land license fee for non-citizens and 1% stamp duty on all transactions. These rates and the valuation criteria, which consider factors like location, development potential, and property condition, ensure a structured approach to property taxation in Grenada.

Does Grenada Have A Sales Tax?

No, Grenada does not have a sales tax. Instead, it implements a Value Added Tax (VAT) system, which applies to goods and services. The standard VAT rate in Grenada is 15%, with a reduced rate of 10% for accommodations in the tourism sector. Certain essential goods, like some food items and medicines, may be exempt or zero-rated to minimize the tax burden on residents. This VAT system replaces the traditional sales tax, offering a broader and more structured approach to taxation.

Do You Need to Pay Taxes in Grenada?

Whether you need to pay taxes in Grenada depends on your residency status and income sources. Grenada does not tax worldwide income, capital gains, inheritance, or wealth, making it attractive for individuals with global earnings. However, residents earning income within Grenada are subject to progressive income tax rates up to 28%. Property owners must pay property tax based on market value and classification, and VAT applies at 15% for most goods and services, with 10% for accommodations. Property transfers incur taxes, with rates varying for citizens, non-citizens, and companies. Non-residents are only taxed on Grenada-sourced income and specific transactions, such as property sales or business activities.

Is There a Tax Treaty Between the US and Grenada?

No, there is no tax treaty between the United States and Grenada. This means that income earned in either country may be subject to taxation under the respective national tax laws without the benefit of treaty provisions to avoid double taxation. However, U.S. taxpayers living or investing in Grenada may be able to claim foreign tax credits or exclusions under U.S. tax regulations to mitigate potential double taxation.

What Taxes do Individuals Need to Pay in Grenada?

Individuals in Grenada are subject to income tax only on earnings sourced within the country, as there are no taxes on capital gains, inheritance, or global income. Grenada’s progressive income tax system includes a 10% rate on the first EC$24,000 of taxable income and 28% on income exceeding this threshold. Additionally, employees contribute 5% of their salary to the National Insurance Scheme (NIS), which funds benefits like pensions, unemployment, and healthcare. Withholding tax at 15% applies to certain types of income, such as dividends, interest, and royalties paid to non-residents, but there is no withholding tax on these payments to Grenada tax residents.

What Taxes do Companies Need to Pay in Grenada?

Companies operating in Grenada are subject to a corporate tax rate of 28% on net income for resident entities, while non-resident companies are taxed only on income sourced within Grenada. Grenada also imposes a value-added tax (VAT) at a standard rate of 15%, with reduced rates of 10% for hotels and diving activities and 0% for specific goods like staple food and water. Employers are required to contribute 4% of their employees' salaries to the National Insurance Scheme, supporting social benefits. Withholding tax at 15% applies to dividends, interest, and royalties paid to non-resident companies. These tax obligations, combined with the absence of a separate capital gains tax, provide a straightforward and structured framework for businesses in Grenada.

What Taxes Must You Pay When Buying and Selling Real Estate in Grenada?

When engaging in real estate transactions in Grenada, both buyers and sellers are subject to specific taxes and fees. Sellers who are Grenadian citizens pay a Property Transfer Tax of 5% on the property's value, while non-citizens are liable for a 15% rate. Buyers who are non-citizens must obtain an Alien Landholding Licence, costing 10% of the property's value. Also, a Stamp Duty of 1% of the purchase price applies to property transactions. Legal fees typically range from 1% to 2% of the purchase price, plus 15% VAT, and real estate agent commissions are usually around 5% of the purchase price, also subject to 15% VAT. 

Are There Any Tax Exemptions or Initiatives in Grenada?

Yes, Grenada offers several tax exemptions and incentives to attract foreign investment and stimulate economic growth. Notably, there are no taxes on capital gains, inheritance, or foreign-sourced income for residents, enhancing its appeal to expatriates and investors. The government provides various incentives, including:

• Tax Holidays. Eligible investments in sectors like tourism, agriculture, and manufacturing may receive income tax exemptions for up to 15 years. 
• Investment Allowances. Approved enterprises can claim allowances up to 100% of qualifying capital expenditure, with unutilized allowances carryable forward for up to 15 years. 
• Customs Duty Exemptions and VAT Suspensions. These apply to the importation of machinery, equipment, and materials for approved projects, reducing initial setup costs for businesses. 
• Tax Credits. Incentives are available for training and research and development activities, promoting skill development and innovation. 

What are Other Popular Countries for Tax Optimization?

Several countries are renowned for their favorable tax regimes, attracting individuals and businesses seeking tax optimization. The Cayman Islands impose no direct taxes, including income, corporate, capital gains, inheritance, or withholding taxes, making them a popular destination for foreign capital, particularly from hedge funds. The United Arab Emirates (UAE) offers a tax-free environment with zero personal income tax, appealing to entrepreneurs, investors, and high-net-worth individuals aiming to minimize tax liabilities. Singapore is known for its low corporate tax rates and absence of capital gains tax, providing a business-friendly environment with a robust financial infrastructure that attracts multinational corporations and investors. Andorra features a competitive tax system with a maximum personal income tax rate of 10% and a corporate tax rate of 10%, along with no wealth or inheritance taxes, appealing to both individuals and businesses seeking tax efficiency.