Taxation in the Caribbean: The Five Citizenship by Investment Countries

Taxation is a complex matter, and of course, policies and rates of tax can change over time. Your personal circumstances and other citizenships (and potential double tax treaties) will also need to be taken into account. Therefore, although great effort has been made to ensure that the details provided are accurate as of the date of writing (September 2024), this overview should be seen as a useful introduction to taxation in each country rather than a detailed guide.

Caribbean Taxes: Personal Taxation

Personal taxation is tax paid by individuals on personal earnings. The sections below detail the rates and thresholds in each country for income tax, social taxes, capital gains tax, inheritance tax, withholding taxes and residential property tax. As you will see, the treatment of tax residents and non-tax residents is often different and so your tax residency status (typically but not always where you spend the majority of your time) will also be relevant.

Amounts are provided in Eastern Caribbean Dollars (XCD), the local currency in each country.

Taxation in the Caribbean: Personal Income Tax

Antigua and Barbuda Taxes: Personal Income

Tax Resident: No personal income tax

Non-tax resident: No income tax

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Dominica Taxes: Personal Income

Tax Resident: A personal allowance of XCD 36,000 is granted annually and then:

• 15% on the first XCD 20,000
• 25% on the next XCD 30,000
• 35% on income above XCD 50,000 in excess of the personal allowance

Non-tax resident:

• 15% on the first XCD 30,000 
• 25% on the next XCD 20,000
• 35% on income above XCD 50,000

In each case, only on income earned in Dominica

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Grenada Taxes: Personal Income

Non-tax resident: A personal allowance of XCD 36,000 is granted annually and then:

• 10% on the first XCD 24,000
• 28% on income above XCD 24,000 in excess of the personal allowance

Non-tax resident:

• 10% on the first XCD 24,000
• 28% on income above XCD 24,000

In each case, only on income earned in Grenada

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Saint Kitts and Nevis Taxes: Personal Income

Tax Resident: No personal income tax

Non-tax resident: No income tax

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Saint Lucia Taxes: Personal Income

Tax Resident: A personal allowance of XCD 5,000 is granted annually, and then:

• 15% on the first XCD 15,000
• 20% on the next XCD 15,000
• 30% on income above XCD 30,000 in excess of the personal allowance

Non-tax resident:

• 10% on the first XCD 10,000
• 15% on the next XCD 10,000
• 20% on the next XCD 10,000
• 30% on income above XCD 30,000

In each case, only on income earned in Saint Lucia

Taxation in the Caribbean: Self-employed Income Taxes

In Grenada, Dominica and Saint Lucia, self-employed persons are generally charged personal income tax on earnings equivalent to the rates applicable to salary income. However, they may be able to deduct certain expenses, thereby reducing the amount attributable to tax. 

Self-employed individuals in Antigua and Barbuda pay tax on profits on a sliding scale up to a maximum rate of 25%. This is applied to all such worldwide income for tax residents but is only applied to income accruing in or derived from Antigua and Barbuda for non-tax residents.

Self-employed individuals in St Kitts and Nevis pay Unincorporated Business Tax at rates of 4% on the value of goods supplied per month above XCD 12,500 and 4% on the value of services supplied per month above XCD 2,000.

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Taxation in the Caribbean: Social Taxes

‍Antigua and Barbuda Taxes: Social

Employee Contribution:

• Social Security: 6.75% on earnings up to XCD 6,500/month
• Medical Benefits: 3.5% on earnings up to XCD 6,500/month

Employer Contribution

• Social Security: 8.75% on earnings up to XCD 6,500/month
• Medical Benefits: 3.5% on earnings up to XCD 6,500/month

Self-employed contributions

Self-employed individuals pay both employee and employer portions

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Dominica Taxes: Social

Employee Contribution

• Social Security: 7.75% on earnings up to XCD 7,000/month

‍Employer Contribution

• Social Security: 6.5% on earnings up to XCD 7,000/month

Self-employed contributions

Self-employed individuals pay both employee and employer portions

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Grenada Taxes: Social

Employee Contribution

• National Insurance Scheme (NIS): 5.5% on earnings up to XCD 5,000/month
  

Employer Contribution

• NIS: 6.5% on earnings up to XCD 5,000/month
  

Self-employed contributions

Self-employed individuals pay both employee and employer portions

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Saint Kitts and Nevis Taxes: Social

Employee Contribution

• Social Security: 5% on earnings up to XCD 6,500/month
• Housing and Development Levy: 3.5% of earnings up to XCD 6,500/month; 10% of earnings between XCD 6,500 and XCD 8,000/month; and 12% of earnings above XCD 8,000/month

Employer Contribution

• Social Security: 5% on earnings up to XCD 6,500/month
• Employment injury benefits: 1% on earnings up to SCD 6,500/month
• Housing and Social Development Levy: 3% of all earnings
• Severance Payments: 1% if all earnings

Self-employed contributions

Self-employed individuals contribute 10% on earnings up to XCD 6,500/month..

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Saint Lucia Taxes: Social

Employee Contribution

• National Insurance Corporation (NIC): 5% on earnings up to XCD 5,000/month

Employer Contribution

• NIC: 5% on earnings up to XCD 5,000/month

Self-employed contributions

Self-employed individuals pay both employee and employer portions.

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Taxation in the Caribbean: Capital Gains Tax

None of the five Caribbean citizenship by investment countries currently impose any capital gains tax.

Taxation in the Caribbean: Inheritance Tax

None of the five Caribbean citizenship by investment countries currently impose any inheritance tax (although transfer taxes may apply if real property is being bequeathed).

Taxation in the Caribbean: Withholding Tax

All five Caribbean citizenship by investment countries impose withholding tax on some or all of the interest, dividends and royalties or similar payments paid from the relevant country and withholding tax is considered an important source of income locally.  

In some cases, withholding taxes apply to both tax and non-tax residents and in others – only to non-tax residents. Such payments are made net of the amount required to be withheld, with the payer accounting for the tax to the government tax authority. The rate is 15% in all but Antigua and Barbuda, where it is 25%. 

This area is too complex to consider in detail in a blog such as this but if income attracting such withholding is likely to be a significant source of income for you, detailed advice should be sought, especially with regard to double taxation treaties with other countries where you may also be taxed on such income.

Taxation in the Caribbean: Property Taxes

All five Caribbean citizenship by investment countries impose annual taxes on residential real property. The rates are typically dependent on the location and type of property owned. Although these are not technically personal taxes, as they are often payable by individuals, they are included here.

• Antigua and Barbuda: 0.2-0.5% of property value
• Dominica: 1.5% of property value (known as a municipal tax)
• Grenada: 0.2-0.5% of property value
• Saint Kitts and Nevis: 0.2-0.3% of property value
• Saint Lucia: 0.25% of property value

Taxation in the Caribbean: Additional Information on Personal Taxes

• Allowances and Deductions: In Dominica, Grenada, and Saint Lucia, taxpayers may be entitled to various deductions and personal allowances, which can reduce taxable income. These may include allowances for dependents, mortgage interest, and other specified expenses.
• Filing Requirements: Self-employed individuals are generally required to keep proper financial records and submit annual tax returns declaring their income and expenses.

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Caribbean Taxes: Taxation of Companies

The current corporate tax rates of the five Caribbean citizenship by investment countries impose on profits are as follows:

• Antigua and Barbuda: 25% 
• Dominica: 25%
• Grenada: 30%, plus 0.5% stamp tax on turnover of between XCD 36,000 and XCD 300,000 and 0.7% stamp tax on turnover of XCD 300,000 and above
• Saint Kitts and Nevis: 25%
• Saint Lucia: 30% (only applied to revenue derived in or sourced from St Lucia)

Value Added Tax (also commonly known as Sales Tax) is required to be charged by businesses if the annual turnover of the business exceeds the relevant threshold. The thresholds and rates are generally as follows, although these may vary for specific industry sectors:

• Antigua and Barbuda: threshold – XCD 300,000 (zero for professional service providers), rate — 17% 
• Dominica: threshold – XCD 250,000, rate — 15%
• Grenada: threshold – XCD 300,000, rate — 15% 
• Saint Kitts and Nevis: threshold – XCD 150,000 (XCD 96,000 for certain professional service providers), rate — 17%
• Saint Lucia: threshold – XCD 400,000, rate – 12.5%

Double Tax Treaties

As many applicants will maintain dual citizenship, the interaction between the two (or more) countries regarding taxation will be important. Double taxation treaties are agreements entered into by two states and aim to prevent the taxpayer from paying tax on the same income twice, to avoid tax evasion and to ensure transparent and fair taxation between the two countries. The taxpayer will typically pay tax in the country in which they are tax resident and their second country will provide tax credits to avoid the income being taxed twice. All five Caribbean Citizenship by Investment countries have signed double taxation agreements with the Caribbean Community (CARICOM), which includes many of the Caribbean states. The other countries with which each have signed double tax treaties are as follows.

• Antigua and Barbuda: Switzerland, United Arab Emirates, United Kingdom
• Dominica: None
• Grenada: Switzerland, United Kingdom
• Saint Kitts and Nevis: Monaco, San Marino, Switzerland, United Arab Emirates, United Kingdom
• Saint Lucia: None

Final Thoughts

We hope that the above gives you a basic outline of Caribbean Taxes and the way personal and business taxation works in the five countries. As noted above, we cannot advise on tax matters. Taxation rules change regularly, and you should seek professional tax advice when determining the taxation effect on you and your family when spending time in or doing business in the relevant country.

FAQ

Who pays Caribbean taxes?

People who are tax residents in the relevant country will be liable for taxation in that country. Tax residency is usually determined by residence in that country for more than 183 days in the tax year. Non-tax residents may pay taxes on profits generated in the relevant country. Citizenship of the Caribbean country does not make a person tax resident in that country.

Companies registered in the relevant country are subject to tax in that country.

What taxes do individuals pay?

Individuals pay taxes on earned income (other than in Antigua and Barbuda and St Kitts and Nevis), dividends, interest and royalties and social taxes. 

Which Caribbean islands impose no personal income tax?

Antigua and Barbuda and Saint Kitts and Nevis impose no personal income tax, although it is noted that they do tax self-employment income. The other three countries impose personal income tax at progressive rates. 

What taxes do Caribbean companies pay?

The main tax on companies is corporation tax ranging from 25 to 30% depending on the jurisdiction. Although not strictly a tax paid by the company, companies (and self-employed  individuals) also collect VAT on behalf of the government. 

Are the Caribbean countries tax havens?

The five Caribbean citizenship by investment countries all have beneficial tax regimes with none imposing any capital gains or inheritance taxes. Unlike true tax havens such as the Cayman Islands, they impose corporate and self-employment taxes and all but Antigua and Barbuda , and St Kitts and Nevis impose personal income taxes. As such, they can be considered a limited form of tax haven, especially for those who do not expect to receive taxable income such as capital gains or foreign-earned income. 

Will I be taxed in the Caribbean and my ‘home’ country?

Generally not, you should be taxed in your country of tax residency. However, some countries tax citizens on their worldwide income (e.g. the United States), and income earned outside your country of tax residency may be taxed at source. Everyone’s personal circumstances are different and it is important to take professional tax advice to eliminate potential double taxation.