Grenada taxes draw foreign investors by allowing them to optimize their taxes to protect their wealth. This guide presents essential information about Grenada’s tax framework by offering insights into the following:
Grenada Tax Structure
Tax Authority: | The Inland Revenue Division (IRD) is the government authority that enforces Grenada tax law. |
Personal Income Tax: | Grenada tax residents must pay personal income tax on on income earned in the country at a rate of 0 to 30 percent. |
Corporate Income Tax: | Companies registered in Grenada pay a flat 30 percent corporate tax. |
Tax Forms: | Individuals do not file tax returns. Companies can file their tax return in person or through their online GTAX account. |
Tax Year: | A company’s fiscal year-end determines its tax year. |
Tax Deadline: | 31 March is the tax deadline for self-employed Grenada tax residents and registered companies |
Currency: | Grenada taxes are paid in Eastern Caribbean Dollar (XCD or EC), the country’s official currency, which is pegged at 2.70 XCD to 1 USD. |
Tax Treaty: | Grenada has several tax agreements but does not have a double tax treaty with the United States. |
Grenada Taxes for Individuals
- Withholding taxes: Grenada imposes a withholding tax.
- Social contributions: Both employees and employers must contribute to the National Insurance Corporation (NIC).
- Stamp duty: Buyers of real estate in Grenada pay stamp duty.
- Property transfer tax: Property sellers pay transfer tax in Grenada.
- Income tax: Income tax in Grenada applies to local income.
Personal income taxes
Grenada personal income tax is imposed on:
- Business income
- Interest
- Labor activity
- Rent
- Royalty
Grenada employs a progressive income tax system, ranging from 0 to 28 percent. Both tax residents and non-residents are not taxed on such income earned up to EC $36,000.
Income amount | Income tax rate |
Up to $36,000 | 0 percent |
$36,001 to $60,000 | 15 percent |
$60,001 and above | 30 percent |
Grenada income tax rates apply to both an employee and an individual living in Grenada who supplies independent personal services. Non-residents pay taxes on income sourced in Grenada.
Foreign tax relief: Foreign tax deductions are generally not applicable unless the opposing jurisdiction has a tax agreement with Grenada, or the taxes have been paid in a British Commonwealth country that provides similar relief for Grenadian tax residents.
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Grenada Taxes for Legal Entities
Domestic companies pay a flat Grenada corporate tax rate of 30 percent. “Domestic companies” refers to the following entities.
- Incorporated or registered as an external business in Grenada.
- Managed and regulated in Grenada
- Trades in Grenada
- Receives earnings from Grenada
- Owns assets in Grenada that generate revenue for the company
In this case, a domestic company pays tax on its global income. The tax treatment is different for non-domestic companies, who pay a withholding tax of 30 percent on chargeable income derived from sources in Grenada. Non-resident companies also pay a 15 percent withholding tax on interest.
Social Security contributions in Grenada
National Insurance Scheme (NIS) is citizen security levy in Grenada, which is paid by businesses and their employees on insurable earnings to receive social welfare benefits. NIS tax rate is 13 percent for 2025, with employees contributing six percent of the tax on their gross wages and employers contributing seven percent.
NIS coverage covers most healthcare services within the Grenada healthcare system for residents.
Corporation tax rates
Tax Type | Resident Companies | Non-resident Companies |
Corporate Tax | 30 percent on worldwide income | 30 percent on income earned in Grenada |
Dividends | 0 percent | 15 percent |
Royalties | 0 percent | 15 percent |
Interests | 0 percent | 15 percent |
Social Contribution | 5 percent | 5 percent |
Value Added Tax (VAT)
The Grenada value-added tax is fixed at 15 percent. The value-added tax system offers special rates for businesses in specific industries:
- Businesses providing tourism accommodations pay ten percent VAT.
- Companies supplying staple food or water are not subject to VAT.
Companies typically pay value-added tax on annual taxable income exceeding EC 300,000 ($111,000).
What is the Grenada Annual Stamp Tax?
The Annual Stamp Tax in Grenada is an annual charge on gross receipts, replacing stamps on bills. It is calculated based on the previous year’s gross revenue and has two tax rates, 0.25 and 0.5 percent.
- 0.25 percent: Businesses with gross revenue over EC 30,000 and under EC 100,000.
- 0.5 percent: Businesses with gross revenue over EC 100,000.
Grenada Tax Benefits
- No worldwide income tax: Grenada residents do not pay personal income tax on global income.
- Tax-free assets: Grenada’s tax system does not impose a tax on wealth, inheritance, and capital gains.
- Corporate tax breaks: Start-up businesses in industries such as manufacturing and tourism may qualify for tax incentives and various tax exemptions, such as the 150-percent tax credit for research and development through the Investment Promotion Act.
- Reduced sales tax: Businesses offering hotel accommodation services are charged a ten percent reduced value-added tax.
- No Controlled Foreign Company regulations: Grenada tax law does not enforce Controlled Foreign Corporation (CFC) regulations, allowing tax residents to own offshore companies without affecting the tax obligations of those entities.
How to Become a Tax Resident of Grenada
International investors and foreign nationals retiring in Grenada can obtain tax residency in the country, which is an effective tax strategy to protect and avoid paying taxes legally and maintain visibility for tax purposes.
Grenada tax residency requirements:
- Obtain legal residency
- Spending a minimum of 183 days in the country annually
- Obtaining a certificate of residency and Grenada Taxpayer Identification Number (TIN)
Grenada does not have a tax residency program allowing foreigners to establish tax residency without residing in the country for at least 183 days.
Grenada citizenship
Foreign investors can apply for the Grenada citizenship by investment program to become a Grenada tax resident. The program is designed to attract foreign investment by allowing foreign nationals to make a non-refundable donation or a real estate investment and obtain citizenship. The program’s minimum investment is $240,000.
Successful applicants receive a Grenada passport and the right to reside in Grenada permanently.
Take a look at our Grenada Citizenship by Investment Ultimate Guide
Filing Tax Returns in Grenada
Anyone liable to pay taxes in Grenada on investment or employment income must first register with the Inland Revenue Division (IRD) and obtain a Taxpayer Identification Number (TIN).
Individuals
Employed individuals pay taxes on their monthly salary through the Grenada Pay-As-You-Earn system (PAYE). The PAYE system withholds monthly employment income taxes from an employee’s gross income. The employer submits PAYE taxes on the 15th of the following month.
Self-employed individuals
Self-employed Grenadian tax residents file their taxes with the Inland Revenue Division by 31 March each year to report income earned in the previous calendar year. They must ensure their tax filing declares all earnings, claims allowable deductions, and calculates any Caribbean taxes owed in compliance with the Inland Revenue Division’s requirements.
Legal entities
Legal entities must file corporate income tax returns by the end of the fourth month after the end of their fiscal year. The tax filing must contain value-added tax reports filed monthly or quarterly, depending on the company’s structure, and any requirement to pay additional taxes, such as PAYE taxes.
PAYE and withholding taxes for employees are submitted by employers on the 15th of each month. The official website for the Grenada Inland Revenue Department, ird.gd, provides a G-TAX e-filing portal.
Other Taxes in Grenada to Consider
Landholding license: Non-resident foreign nationals must apply for an Alien Landholding License (ALHL) to legally buy Caribbean real estate in Grenada. The license fee is ten percent of the property’s market value. Investors applying for Grenada citizenship by investment are not required to obtain an ALHL to make a qualifying real estate purchase.
Stamp duty: Based on the market property value, stamp duty for selling real estate in Grenada is one percent.
Sales tax: The sales tax in Grenada is 15 percent. Businesses operating in the tourism sector pay a reduced 10 percent rate.
Import tax: Customs duty ranges from 0 to 40 percent. All taxable imports are assigned a Harmonized System (HS) code.
Excise tax: Excise taxes apply to specific imported products, such as vehicles, alcohol, tobacco, and petroleum.
Property Taxes in Grenada
Rental income
An individual or business owner must pay income tax on rental income. The amount of tax payable depends on the property owner’s total earnings, including the rental value.
Annual property tax
Paying property taxes in Grenada is required for residential and commercial property owners. The Grenada annual property tax rate is based on the property’s use. The property tax rate for residential property and hotel accommodation is 0.5 to 0.8 percent. 0.25. The commercial property tax rate is 0.2 to 0.5 percent.
How to Reduce Taxes as a Foreigner in Grenada
Foreign residents in Grenada can utilize tax credits and deductions to limit their tax liability. One of the most effective tax strategies for US citizens is reducing gross income subject to taxation by filing Form 1116 for the foreign tax credit with FORM 1040 when submitting an annual income tax return to the US Internal Revenue Service (IRS).
Other methods include increasing contributions to IRAs, 401ks, SIPPs, RRSPs, and other retirement accounts. Selling an investment that has lost value and property maintenance costs can reduce your annual tax bill by itemizing your deductions.
Tax deductions for foreign investors in Grenada
Foreign Tax Credit: The Foreign Tax Credit (FTC) submitted with FORM 1116 allows American nationals living in Grenada to deduct the main taxes paid on income to the Grenadian government.
Capital Gains Tax exemption: Non-UK residents have a separate capital gains tax, exempting them from capital gains on most UK assets, except for residential property and specific business-related assets.
Foreign Earned Income Exclusion: The Foreign Earned Income Exclusion (FEIE) submitted with FORM 2555 allows Americans living in Grenada to exclude income earned in the country from their US taxable income.
RRSPs and Pensions deductions: Canadian citizens withdrawing from registered retirement accounts like RRSPs or RRIFs may reduce withholding tax rates under specific double taxation treaties.
Foreign Housing Exclusion: Americans who own a primary residence in Grenada can deduct housing-related expenses from their US taxes, including building tax, maintenance costs, and mortgage interest. This exclusion is only available to those who claim the FEIE through filing FORM 2555.
Grenada Double Tax Treaties and Agreements
As a signatory of the Caribbean Trade and Economic Union Agreement, Grenada has Double Taxation Agreements with Caribbean Community (CARICOM) member states, including:
- Antigua and Barbuda
- Barbados
- Belize
- Dominica
- Guyana
- Jamaica
- Monaco
- Saint Kitts and Nevis
- Saint Lucia
- Saint Vincent and the Grenadines
- Trinidad and Tobago
Exchange of tax information between Grenada and other countries
The Government of Grenada has Tax Information Exchange Agreements established through the OECD’s Common Reporting Standard (CRS) to curb tax evasion with EU countries, Australia, Canada, New Zealand, Singapore, Switzerland, and the United Kingdom.
Grenada also complies with the Foreign Account Tax Compliance Act (FATCA) to report financial accounts of American citizens paying income taxes in the country.
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Frequently Asked Questions about Grenada Taxes
The benefit of Grenada tax residency is that only income earned in Grenada is subject to taxes, lowering the overall cost of living in Grenada.
Grenada is not a tax haven for individuals or businesses, with income tax levied on both. Foreigners can use the services of banks in Grenada for tax optimization, provided the income they earn is from foreign sources only.
Grenada is not a Caribbean tax haven, as corporations and individuals, whether employed or self-employed, are required to pay income taxes.
