Corporate Tax in Grenada | Residence & Incentives

Understanding Corporation Tax in GrenadaCopy link to section

Corporation tax in Grenada is a direct charge on the profits and capital gains of companies and similar legal entities, levied under the Income Tax Act at a headline rate of up to 28 to 30 percent. The country runs a territorial system, so income is generally taxed only where it is earned or sourced within its borders. This places it well outside the category of zero-tax jurisdictions such as the Cayman Islands or the British Virgin Islands.

For a foreign owner weighing where to base or expand a business, the distinction matters: this is a genuine taxing jurisdiction with cooperation obligations, not an offshore shell. The European Commission removed it from its tax-haven blacklist in 2018, confirming alignment with international disclosure standards. You can review the governing rules directly on the IRD income tax page.

This article explains how the corporate charge works, who pays it, how the base is computed, what reliefs exist, and how filing and penalties operate. It is most relevant to non-resident investors and their advisers assessing a Grenadian company or branch.

Legal Basis: The Income Tax Act and the Charge on Company ProfitsCopy link to section

The charge on company profits rests on the Income Tax Act, Act No. 36 of 1994, published as Chapter 149 of the Laws of Grenada. The same statute taxes individuals and companies alike, with separate operative provisions defining the chargeable income of each.

Section 10 sets out how a company's chargeable income is determined, while the assessable sources are listed at section 29. In practice, the figure that matters to you is the aggregate income from those defined sources for the year of assessment, reduced by permitted deductions.

Any person who owns or operates a business must register with the tax authority before trading. The full statutory text is available through the Income Tax Act repository.

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The Corporation Tax RateCopy link to section

Companies carrying on business activity are generally taxed at a flat rate of 28 percent on profits, after deducting expenses wholly and exclusively incurred in producing income and the allowances the law permits. There is no graduated schedule; one rate applies across the profit band.

A point of caution on the headline figure. The Ministry of Finance business guidance states the company rate as 30 percent of net profit, while practitioner sources aligned with the revenue authority cite 28 percent.

The jurisdiction does not levy a separate capital gains tax. Gains are folded into a company's taxable income and bear the corporate rate. Value Added Tax sits apart from this charge, applied at a standard 15 percent on supplies.

Residence-Based Liability: Resident vs. Non-Resident CompaniesCopy link to section

Residence drives the scope of what gets taxed. A company is treated as resident if it is registered in the country or if its head office sits there, and a resident entity is taxed on worldwide income.

Non-resident companies face a narrower charge. They are taxed only on income with a Grenadian source and pay nothing on foreign-sourced profits.

A foreign company that operates through a permanent establishment is taxed on the profits attributable to that establishment. Without such an establishment, a non-resident may still be caught by withholding tax on certain local-source receipts, including interest, royalties, and management fees.

One feature works in favour of resident holding structures: there are no Controlled Foreign Corporation rules. A resident may own offshore subsidiaries without their income being attributed back to the resident's own tax position.

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Computing the Tax Base: Chargeable Profits, Allowable Expenses and Capital AllowancesCopy link to section

The calculation starts with accounting profit, usually drawn from financial statements prepared under IFRS or another applicable standard. From there, adjustments bring the figure to taxable income by applying the deductions, allowances, and exemptions the statute permits.

Deductible expenses are those wholly and exclusively incurred in producing income, supplemented by specific statutory allowances. Capital allowances and accelerated depreciation reduce the base further, rewarding reinvestment in plant and equipment.

A worked example shows the mechanics:

Two limits are worth keeping in view. Deductions cannot exceed chargeable income, so they cannot manufacture a loss to be carried backward. Income already taxed under the Annual Stamp Tax Act at 0.5 percent is excluded from the income tax base. Companies are generally expected to file audited or reviewed accounts with the return.

Loss Relief and Carry-Forward of Company LossesCopy link to section

Trading losses may be carried forward for six years, a rule applying from the 2015 tax period onward. Each year's carried loss can only offset chargeable profits arising in a later year.

The relief runs forward only. Reported legislation provides no carry-back of losses to earlier profitable years.

No group relief or loss-pooling regime is confirmed in available sources. If you plan to hold several local entities, do not assume one company's losses can shelter another's profits; treat consolidation as unavailable until the revenue authority confirms otherwise.

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Filing, Instalments and Payment of Corporation Tax (G-TAX)Copy link to section

Returns are submitted online through the G-TAX system run by the Inland Revenue Division. The portal handles registration, filing, and payment for corporate income tax, VAT, and PAYE.

The corporation tax return is due within 90 days after the company's fiscal year-end. A separate source frames this as the end of the fourth month after year-end; the two are broadly consistent, and the 90-day figure is treated as primary here.

Payment does not wait for the return. Advance monthly instalments fall due based on the prior year's liability, with any remaining balance settled when the return is filed.

The Comptroller may grant an extension of time to file under the Tax Administration Act, but this does not move the payment deadline unless an extension to pay is expressly given. Any application must be made before the original due date. Tax records and copies of filed forms must be retained for at least six years. You can register and file through the G-TAX portal.

Penalties and Interest for Late Filing or Non-ComplianceCopy link to section

Late filing draws a penalty set at the greater of two measures. The first is 5 percent of the tax owing plus a further 1 percent for each month or part-month the failure continues. The second is EC $500 plus EC $100 for each month or part-month of continued default.

The revenue authority may apply penalties and interest to any non-filing, late-filing, or late-paying taxpayer. The statute carries distinct provisions for general penalties, failure to furnish a return, and failure to furnish a correct return, alongside mechanisms for mitigation and the compounding of offences.

A specific late-payment interest rate for corporation tax is not separately confirmed in the available sources; the 1.5 percent per month rate documented applies to Annual Stamp Tax instalments. Where a company never registers, tax can be assessed for the years it operated, up to a maximum of six years.

Fiscal Incentives, Tax Holidays and Exemptions for CompaniesCopy link to section

Approved projects can access meaningful relief. Concessions are administered through the Grenada Investment Development Corporation under the Fiscal Incentives Act, and qualifying ventures may receive tax holidays of up to 15 years together with import duty exemptions on machinery, equipment, and raw materials.

Eligibility tends to follow sector. Tourism, agriculture, and manufacturing are the activities most likely to attract holidays or reduced rates.

Several further reliefs support investment and employment:

• A 150 percent tax credit for research and development for start-ups in manufacturing and tourism, under the Investment Promotion Act
• Investment allowances and accelerated depreciation on capital expenditure
• Tax credits tied to job creation and skills-training programmes

Incentives reduce a company's effective rate, which carries a separate consequence for large groups discussed in the Pillar Two section below.

Treatment of Foreign-Owned and International CompaniesCopy link to section

The limited liability company and the International Business Company are the common vehicles for foreign owners. An IBC may serve only foreign clients and can access exemptions from corporate income tax, capital gains tax, and withholding tax on dividends.

Withholding tax is the main local cost for non-residents earning from Grenadian sources. A 15 percent rate applies to a broad list of payments, including interest other than bank deposits, dividends, rent, royalties, management charges, commissions, and fees. The tax must be remitted within seven days after the payment or credit.

Treaty relief can reduce these costs. The country holds double taxation agreements with the United Kingdom and CARICOM members, which prevent the same income being fully taxed twice and may lower withholding rates on covered payments. Information is exchanged with other states under CRS and FATCA, so a foreign-owned structure should be built on the assumption of transparency.

The OECD Global Minimum Tax (Pillar Two) and Outlook for Corporation TaxCopy link to section

Pillar Two establishes a 15 percent global minimum effective tax rate for multinational groups with consolidated revenue above EUR 750 million, met in at least two of the four preceding fiscal years. The GloBE rules ensure that an in-scope group pays at least that floor in every jurisdiction where it operates.

Where a group's effective rate in a jurisdiction falls below 15 percent, a top-up charge can arise. That charge may be collected in the parent's jurisdiction, in another group member's jurisdiction, or locally through a Qualified Domestic Minimum Top-up Tax. The mechanics are set out in the OECD GloBE rules.

No public source confirms that Grenada has enacted or committed to GloBE or QDMTT legislation. As a small developing economy, it does not appear among first-wave implementers in OECD tracker sources.

For ordinary trading companies the outlook is straightforward, because the 28 to 30 percent headline rate sits well above the 15 percent floor and does not itself trigger a top-up. The exposure lies elsewhere: a company inside an in-scope group that benefits from a 15-year holiday or other concession reducing its effective rate below 15 percent could face a top-up charge somewhere in the group. Structures relying on holidays or low-taxed financing deserve a fresh review against these rules.

ConclusionCopy link to section

For a foreign business owner, the residency classification of the company is the pivotal variable: it determines the scope of chargeable profits and, by extension, whether available incentives and holidays translate into genuine tax savings or simply reduce a liability that was already limited. Getting that classification right, and then keeping the G-TAX filing cycle clean, matters more than any single rate or exemption.

The practical next step is a structural review before incorporation or before the next filing period, specifically to confirm how Grenada treats the company's profits and whether any incentive approvals align with actual operations.

How Expanship Can Help Your Business in GrenadaCopy link to section

Expanship supports foreign owners with the full corporate tax cycle, from registering an entity with the Inland Revenue Division through to computing chargeable profits, claiming allowances, and filing on G-TAX within the 90-day deadline. The same team handles the wider obligations a non-resident company carries once it is trading.

• Company formation, including LLC and IBC structures
• Registered agent and registered office services
• Tax registration and preparation of corporate returns
• Ongoing compliance management and statutory record-keeping
• Accounting and bookkeeping aligned to filing requirements
• Introductions to banking partners

To discuss your structure and obligations, contact Expanship Grenada.

Frequently Asked QuestionsCopy link to section