1) What are my obligations as a taxpayer?
a) Display your VAT registration certificate in a visible location where your business is conducted.
b) Filing returns on the prescribed form before the due date.
c) Pay the amount of tax payable in respect of the taxable period to which the return or demand notice relates.
d) Issuing Tax invoices and receipts as legislatively required.
e) Notify the Comptroller Inland Revenue of any change in the status or ownership of the business.
f) Requesting the cancellation of registration, in writing, from the commissioner of Inland Revenue.
h) Upon ceasing a taxable operation, filing a final return for the last taxable period, and returning the VAT registration Certificate
2) What is a taxable activity?
Any activity carried out continuously or regularly by a business, trade, manufacturer, or professional, association or club.
3) Is a taxpayer representative the same thing as an agent?
4) How long do I have to keep my books and records?
Every taxable person shall maintain records as required by law for 7 years.
5) If I do not have the money to pay, should I still file my return?
Yes. You can file your return and request a payment arrangement with the IRD.
6) Who is required to be registered?
a) For the purposes of VAT, any person who conducts a taxable activity and whose annual gross standard rated and zero-rated supplies exceed EC$300,000 is required to apply for registration.
b) Any person who owns or operate a business within the state of Grenada for Annual Stamp Tax
c) Any individual who earns in excess of $3,000. Monthly or $36,000 annually
7) What is CIT?
This is a direct tax levied on the income or capital gains of a corporation and other similar legal entities
8) What is PAYE?
PAYE (Pay as You Earn) is the system used to calculate and collect Personal Income Tax from payments made to employees. Each time the employer makes a payment to an employee, the employer must deduct the appropriate amount of tax in accordance with the Tax Deduction Tables supplied by the IRD.
9) What is personal Income Tax?
It is a tax levied on the wages, salaries, dividends, and other Income a person earns through the year.
d) The following types of Income are subject to personal income tax:
i.Gains or profits from any trade, business, or profession
ii.Salary, wages, overtime, incentive pay, commissions, bonuses, dividends.
10) Who must file a return?
All individuals and businesses who are registered with the Inland Revenue Division for Personal Income Tax (PIT), Corporate Income Tax (CIT) or Annual Stamp Tax (AST).
11) What is a Tax Identification Number?
f) The Tax Identification Number (TIN) is a number that simplifies and streamlines the way you deal with the Inland Revenue Division. The number assigned by the IRD to your application for registration is a permanent and unique number assigned to you. This TIN should be quoted in all correspondence with the IRD.
12) How to obtain a Taxpayer Identification Number?
All individuals and businesses get a TIN when they register with the Inland Revenue Division.
13) When are penalties and interest applied?
Penalties and interest may be applied by the IRD to any non-filing, late filing, or late paying taxpayer.
14) How can I appoint a person to act on my behalf?
You may appoint a representative to act for you. You must prepare a letter of authorization and send it to the IRD. An authorized representative, often a lawyer, accountant, custom broker, or tax professional from outside your business, can register your business, access all your accounts, make account enquiries, and provide information to update accounts. Authorized representatives remain authorized until you revoke their authorization.
15) What is a Tax resident?
A tax resident is a person who spends more than 183 days a year in Grenada. For companies, they can become a tax resident of Grenada if it is registered in the country, or its head office is in Grenada.
16) What is Withholding tax?
It is a tax levied when income, such as dividends, is paid by a resident of Grenada to a non-resident. The tax rate is 15%.
17) Am I entitled to a refund?
If the calculation on your tax return results in a negative amount of Income tax payable
18) How can an individual get a tax refund?
You must file a return for the reporting period and apply for a tax refund on the prescribed form.
19) What is a Vat Invoice?
It is a document issued by a VAT registered business stating the details of a taxable supply and all other related information as prescribed by the VAT legislation.
20) What should I do if I want to cancel my registration for VAT?
Submit a written letter of request to the comptroller Inland Revenue Division.
21) What are zero rated supplies?
Zero rated supplies refer to items that are subject to 0% VAT on their input supplies.
22) If my business does not do as much as it used to, what should I do?
You can apply to the Comptroller Inland Revenue Division for VAT deregistration.
23) When to apply for VAT registration?
A business can apply for VAT registration if:
- - At the end of any period of 12 months or less, the total value of taxable supplies exceeds $300,000.
- - At the beginning of any period, there are reasonable grounds to expect that the value of your taxable supplies will exceed $300,000.
- 24) If I don’t see a certificate of VAT registration displayed at a business, do I have to them VAT if they are charging me?
All VAT registered businesses must display their VAT registration certificate in an area visible to customers.
25) What is the annual property tax rate?
The annual property tax rate is up to 0.8% of the market property value.
The first $100,000 is deducted from the property value when calculating the tax.
However please note that the deduction is only applied to one property.
26) What is transfer tax?
Transfer tax is paid when real estate is sold. If a citizen sells the property, they pay 5%. If a foreigner sells the property in Grenada, they pay 15%.
International Tax Agreements
27) What tax treaties Grenada has with other countries?
Grenada has a Double taxation Treaties with the United Kingdom and other countries of the Caribbean Community (CARICOM).
Therefore, if a tax resident of Grenada earns income in one of these countries, taxes will not have to be paid in both countries in full.
28) Do Grenada have any other agreements with other countries?
Yes. Grenada shares tax information with other countries under CRS and FATCA.
CRS is a standard for the international exchange of account information between tax authorities. Under CRS, Grenada shares the following information:
- A taxpayer’s name, TIN, date, and place of birth.
- An account numbers.
- Data on capital gains.
- A name and identification number of the financial institution
FATCA stands for the Foreign Account Tax Compliance Act. Its purpose is to prevent American citizens and residents from avoiding paying taxes.
Under FATCA Grenada submits information on accounts and other assets exceeding $50,000 to the US Internal Revenue Service.