The framework for Caribbean taxes is linked to offshore banking and tax havens, which has made the Caribbean a crucial hub for global finance for individual investors and legal entities. Countries that offer Caribbean citizenship by investment do not require tax residents to pay wealth capital gains or inheritances taxes. This guide presents everything you need to know on:
Who pays taxes in Caribbean countries?
Taxable items and tax rates in the Caribbean depend on whether you are a person or legal entity and a tax resident.
Individual tax residents are people who live in a Caribbean country for more than 183 days a year. This can be people who are employed by a company in the Caribbean, who live there on a retirement income, or who have investments in the Caribbean. Caribbean tax residents are required to pay income taxes in Caribbean countries that impose income tax.
The following criteria determine Caribbean tax residency:
- Living in the country for at least 183 days a year.
- Valid registered address in the country.
- Social, economic, political, or cultural activities in the country.
All legal entities registered or operating in the country are tax residents whether they earn all their income in the Caribbean or not.
For Caribbean countries that impose an income tax, non-residents pay taxes on income earned in the country.
Caribbean Income Tax for Individuals
Antigua and Barbuda
Antigua and Barbuda is considered a Caribbean tax haven for individuals as there is no personal income tax. The Government of Antigua and Barbuda taxes on personal income were abolished in 2016, eliminating income tax obligations for employees and self-employed individuals.
Dominica
Dominica has a low tax regime for individual tax residents. Foreign income is not taxed in Dominica and tax residents pay personal income tax rates of zero to 35 percent on income earned in the country. However, the top tax rate is relatively high compared to other Caribbean countries.
Tax rates in Eastern Caribbean Dollars (EC):
- $0 to $30,000 = 0 percent
- $30,001 to $50,000 = 15 percent
- $50,001 to $80,000 = 25 percent
- $80,001 above = 35 percent
Grenada
Grenada taxes on income are favorable for individual tax residents. There is no tax on income earned overseas, and the tax rates vary for income sourced in Grenada, from 0 to 30 percent. The tax-free income tax threshold is favorable for low earners.
Tax rates in Eastern Caribbean Dollars:
- $0 to $36,000 = 0 percent
- $36,001 to $60,000 = 15 percent
- $60,001 and above = 30 percent
St Kitts and Nevis
As a pure tax haven for individuals, people living in St Kitts and Nevis do not pay income tax on local or global income sources. Employed individuals and sole traders do not have an obligation to pay income tax or submit tax returns to the Inland Revenue Department.
St Lucia
While the St Lucia tax framework is favorable for individuals, there is some income tax liability on personal income. The personal income tax rate ranges from zero to 30 percent. The income tax-free threshold is relatively low compared to other countries offering citizenship by investment in the Caribbean.
Tax rates in Eastern Caribbean Dollars:
- $0 to $18,400 = 0 percent
- $18,401 to $30,000 = 20 percent
- $30,001 and above = 30 percent
Individual income tax rates
Country | Personal Income Tax Rate |
Antigua and Barbuda | 0 percent |
Dominica | 0 to 35 percent |
Grenada | 0 to 28 percent |
St Kitts and Nevis | 0 percent |
St Lucia | 0 to 30 percent |
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Caribbean Income Tax for Legal Entities
Antigua and Barbuda
Business income in Antigua and Barbuda is taxed at a flat rate of 25 percent on worldwide income for resident companies. Non-resident companies pay a 25 percent income tax on local income. Antigua and Barbuda International Business Companies (IBCs) do not pay corporate income tax.
Dominica
Dominica registered businesses pay a flat 25 percent income tax rate. Corporate taxes are charged on the company’s net profit. Non-resident companies pay taxes at the same rate on income earned in Dominica.
Grenada
Like Antigua and Barbuda, corporate tax is a flat 25 percent rate in Grenada. Non-resident companies pay corporate taxes at the same rate on income earned in Grenada.
St Kitts and Nevis
Companies in St Kitts and Nevis are liable to pay income tax. The St Kitts and Nevis tax on corporate income is 25 percent. Non-resident companies pay a corporate tax rate of 25 percent on income earned in St Kitts and Nevis. Certain companies may access tax incentives, including a 15-year exemption on business income.
St Lucia
St Lucia-registered companies pay a 30 percent income tax on their global income, and legal entities registered in other countries pay a 30 percent income tax on St Lucia-sourced income.
Corporate income tax rates
Country | Personal Income Tax Rate |
Antigua and Barbuda | 25 percent |
Dominica | 25 percent |
Grenada | 25 percent |
St Kitts and Nevis | 25 percent |
St Lucia | 30 percent |
Withholding tax
Withholding taxes on dividends, royalties, and interest are not paid by resident companies in the Caribbean except for St Lucia. St Lucia registered companies pay a withholding tax rate of 10 percent on interest and royalties. Non-resident companies investing in the Caribbean pay withholding tax rates on dividends, royalties, and interest of 15 to 25 percent.
Country | Dividends | Interest | Royalties |
Antigua and Barbuda | 25 percent | 25 percent | 25 percent |
Dominica | 15 percent | 15 percent | 15 percent |
Grenada | 15 percent | 15 percent | 15 percent |
St Kitts and Nevis | 15 percent | 15 percent | 15 percent |
St Lucia | 0 percent | 25 percent (15 percent for CARICOM residents) | 25 percent (15 percent for CARICOM residents) |
Other Caribbean Taxes
Social Security
Both employers and employees are required to make a Social Security contribution to Caribbean tax authorities. The contribution is charged on a percentage of the employee’s gross wages (insurable earnings) and is typically split between the employee and the employer.
Country | Social Security Contribution | Employee Percentage | Employer Percentage |
Antigua and Barbuda | 14 percent (private sector) 13 percent (public sector) | 6 percent (private sector) | 8 percent |
Dominica | 14 percent (employees without redundancy) 14.25 percent (employees with redundancy) | 6.5 percent | 7.5 percent (employees without redundancy) 7.75 percent (employees with redundancy) |
Grenada | 12.5 percent | 6.75 percent | 5.75 percent |
St Kitts and Nevis | 11 percent | 5 percent | 6 percent |
St Lucia | 10 percent | 5 percent | 5 percent |
VAT in the Caribbean is not paid for services related to the following:
- Finance
- Education
- Religion
- Construction
- Real estate sales
- International/domestic transportation of goods and passengers
- Sale of agricultural goods
- Electricity supply
- Daycare
Property taxes for buyers and sellers
Caribbean real estate buyers and sellers are required to pay stamp duty on the sale of property. The transfer tax is charged as Stamp Duty. Foreign buyers of Caribbean real estate must apply for an Alien Landholding License (ALHL) to legally buy property in the Caribbean. ALHL fees and property transfer tax rates are typically charged as a percentage of the property’s value.
Country | Buyer | Seller | ALHL |
Antigua and Barbuda | 2.5 percent | 7.5 percent | 5 percent |
Dominica | 2 percent | 2.5 percent | 10 percent |
Grenada | 15 percent | 10 percent | 10 percent |
St Kitts and Nevis | 6 to 10 percent | 10 percent | |
St Lucia | 2 percent | 2.5 to 5 percent (10 percent for non-resident) | $3,000 to $40,000 |
Annual property tax
Caribbean annual property taxes are assessed on the property’s market value. Property tax rates depend on the property type, whether residential or commercial property.
Country | Property Tax |
Antigua and Barbuda | 0.1 to 0.5 percent |
Dominica | 0 percent (1.25 percent on property in Roseau and Canefield) |
Grenada | 0.1 to 0.5 percent |
St Kitts and Nevis | 0.1 to 0.75 percent |
St Lucia | 0.25 to 0.4 percent |
In the Caribbean, property such as agricultural land, government-owned buildings, and charitable, cultural, and educational real estate is typically exempt from property tax.
Import taxes
Import duties are paid on goods imported into Caribbean states. The duty rate varies by country but generally includes customs duties, sales tax, and excise taxes for specific items. These taxes are imposed on most imported goods, and the rates depend on the product’s type, value, and origin. Electronics, vehicles, and luxury goods often face higher duties.
For example, import duty on vehicles imported into Antigua and Barbuda can be as high as 60 percent of the vehicle’s value. This includes customs duty, sales tax, and an environmental levy. Essential items like food, medical supplies, and raw materials may qualify for reduced rates or exemptions.
How to Join the Caribbean Tax System
While the process to become a Caribbean tax resident is slightly different, the general steps typically involve establishing residence for at least 183 days and obtaining a residence permit in the country.
Caribbean residency is typically obtainable through:
- Employment
- Studies
- Family reunification
- Retirement
- Investment
Tax residency program
Antigua and Barbuda offers a unique Caribbean tax residency program, allowing foreign nationals to obtain tax residency without the 183-day physical presence requirement. The program requires:
- Maintaining a residential address
- Spending at least 30 days in the country annually
- Earning an annual income of at least $100,000
- Paying a flat annual tax of $20,000
- Obtaining a certificate of residency and Antigua Taxpayer Identification Number (TIN)
Caribbean citizenship
Caribbean citizenship by investment (CBI) programs provide an option to obtain tax residency in the Caribbean. These programs allow foreign nationals to contribute to the country’s economic growth and receive citizenship in return. The most affordable investment program starts with a minimum investment of $200,000.
An advantage of Caribbean citizenship programs is that investors can obtain a Caribbean passport by purchasing approved real estate without paying for an Alien Landholding License.
Take a look at our Caribbean Citizenship by Investment Ultimate Guide
Caribbean States that Exchange Tax Information
Caribbean countries, including Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, and St Lucia, exchange tax information as participants in the Common Reporting Standard (CRS) Automatic Exchange of Information system. The CRS aims to prevent tax evasion and ensure tax residents adhere to tax liabilities.
Countries like Australia, France, and China are on the system, and information is exchanged between Caribbean tax authorities and these countries.
Over 150 countries and territories comprise the CRS network. The United States is not a participant but a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The US government has tax transparency and information exchange agreements with the following Caribbean countries:
- Anguilla
- Antigua and Barbuda
- Aruba
- Bahamas
- Barbados
- Cayman Islands
- Curacao
- Dominica
- Grenada
- Montserrat
- St Kitts and Nevis
- St Lucia
- Saint Martin
- Saint Vincent and the Grenadines
- Trinidad and Tobago
- British Virgin Islands
Tax treaties have been established between Caribbean countries through the membership of the Caribbean Community (CARICOM).
How much VAT do they pay in the Caribbean?
Value-added tax (VAT), or sales tax, is paid by companies in the wholesale and retail trade or those that provide services in the Caribbean countries.
Wholesale and retail companies pay tax if their taxable income exceeds EC $150,000 ($55,500). Companies providing services pay VAT if their total revenue earned from their services exceeds EC $96,000 ($35,500).
The typical VAT rate is 15 percent, but it varies from country to country. Caribbean companies in the tourism industry generally pay a reduced VAT rate of 10 percent.
Country | VAT Rate | Special VAT Rate (Hotel Accommodation) |
Antigua and Barbuda | 15 percent | 14 percent |
Dominica | 15 percent | 10 percent |
Grenada | 15 percent | 10 percent |
St Kitts and Nevis | 17 percent | 10 percent |
St Lucia | 12.5 percent | 10 percent |
Challenges in Caribbean Taxation
The Caribbean is the ideal destination for tax optimization, but this comes with several challenges for foreign tax residents in the Caribbean. Many international governments deem Caribbean tax havens illegal and with growing globalization, this has developed a need for tax transparency. Caribbean countries have signed Tax Information Exchange Arrangements (TIEAs) to combat money laundering and tax evasion.
While the Caribbean Community (CARICOM) has a double taxation treaty, most member countries do not have tax treaties with key economies, such as the United States, Canada, the UK, and the European Union. This means many individuals and legal entities may increase their tax obligations when becoming Caribbean tax residents.
Frequently Asked Questions About Taxes in the Caribbean
Caribbean tax havens like British Virgin Islands, Anguilla, and the Cayman Islands are Caribbean islands with no property tax. Dominica does not impose property taxes, but properties located in Roseau or Canefield are subject to a 1.25 percent municipality tax.
