Taxes in Dominica

The Inland Revenue Division (IRD), led by the Comptroller of Inland Revenue, administers income tax, corporate tax, VAT and related filings under laws including the Income Tax Act, VAT Act 7/2005 and Excise Tax Act 8/2005. Customs and Excise Division handles import duties and excise matters. Dominica uses self-assessment and eFiling, and the available national framework does not identify a separate provincial or municipal tax authority. A resident is generally someone present in Dominica for more than 183 continuous days. Residents are generally taxable on worldwide income, while non-residents are taxable on income sourced in Dominica. Taxable personal income can include employment income, business income, rent and royalties, interest or discounts, dividends, fees and annuities. A resident allowance of XCD 30,000 applies before the chargeable-income rates are applied: 0% on XCD 0–30,000, 15% on XCD 30,001–50,000, 25% on XCD 50,001–80,000 and 35% above XCD 80,000. Qualifying deductions can include mortgage interest, approved donations, student-loan relief, and property or health insurance, subject to the applicable conditions. A resident whose only income is employment income below XCD 30,000 per year generally does not have to file a personal income-tax return. Filing is required for self-employed income, business income, partnership income, a loss, several income sources and other situations covered by the tax rules. A non-resident carrying on business in Dominica must file a return regardless of whether the business makes a profit or loss. Resident returns and the related balance are generally due by 31 March for a January–December year. Employers withhold PAYE from chargeable employment income and remit it with a monthly return by the 15th of the following month. The PAYE rates are 15% on the first XCD 20,000, 25% on the next XCD 30,000 and 35% above that level. Employers also submit the TD.5 annual return by 31 January, including remuneration and relevant non-wage payments. Companies pay corporate income tax at 25% of net profit or assessable income. A company files its return with financial statements within three months after the end of its fiscal year. Corporate instalments are generally 25%, 35% and 40% by the end of the third, sixth and ninth months of the fiscal year. For a January–December year, the usual dates are 31 March, 30 June and 30 September. Partnerships also have a return obligation. VAT registration is generally required when expected annual gross sales exceed XCD 250,000. The standard VAT rate is 15%; accommodation and diving services use a 10% rate. Exempt supplies include specified medical, financial, education and day-care services, residential rent, DOWASCO water, books and transport. Zero-rated items include rice, flour, sugar, milk, infant formula, fuel and the first 100 electricity units for a DOMLEC dwelling. Registered businesses collect VAT and file and pay it by the 20th of the following month. Import VAT is normally paid by the importer, while an imported service is generally accounted for by its recipient. A late VAT return attracts XCD 100 per month or part of a month, while late payment attracts a 10% charge plus 1% interest per month. Withholding tax generally applies at 15% to payments to non-residents, including dividends, interest or discounts, rent of movable or immovable property, royalties, management charges, commissions, fees, annuities and trust income. The payer deducts and remits the tax by the 15th day after the end of the payment month and provides the required certificate or return. Excise tax applies to manufacturers and importers of goods such as alcohol, cigarettes, vehicles and petrol. Monthly returns and payments are generally due by the 20th. Official examples include XCD 2.60 per litre for rum, XCD 2.60 per litre for liquor or cordial, XCD 1.20 per litre for wine, XCD 12.60 per litre for whiskey, XCD 22 per kilogram for cigarettes, XCD 2.38 per gallon for diesel and XCD 3.00 per gallon for gas. Vehicle excise examples are 15% or 28%, depending on the vehicle. Rates depend on the goods and can change. Travel tax is 7.5% of each travel ticket for a journey beginning in Dominica. The carrier or agent is responsible for collection and payment, normally by the 15th of the following month. A charter operator may have to pay before departure. Imports can attract customs duty calculated using the CIF value and the CARICOM Common External Tariff based on HS 2017, together with a Customs Service Charge, Environmental Surcharge, excise tax and VAT. A courier shipment with a CIF value of no more than XCD 150 can be charge-free, but the relief excludes commercial, industrial or occupational use and tobacco or alcohol. For a January–December tax year, the recurring calendar includes the 31 January employer annual return, the 31 March personal and company returns, remaining personal or corporate tax and the first corporate instalment, the 30 June second instalment and the 30 September third instalment. Fiscal-year taxpayers follow dates calculated from their own year-end. The IRD can assess tax from a filed return. If a taxpayer does not file, it can issue an estimated assessment. An audit may involve data review, contact with the taxpayer, a records or site visit, a proposed assessment, a two-week opportunity to respond and a revised assessment. Late filing can attract 5%, while late payment can attract 10% plus 1% interest per month. Refund timing is not guaranteed because processing follows filing date and can be affected by budget and review constraints. A taxpayer can object in writing within 30 days after receiving the relevant notification or assessment. A further appeal to the Appeal Commissioners generally must be filed within another 30 days, followed by access to the courts where available. During an audit, a taxpayer normally has two weeks to answer a proposed assessment. Cross-border tax treatment depends on residence, the source of the income and any applicable agreement. Dominica has a CARICOM multilateral tax agreement and a tax treaty with Switzerland among the documented agreements. A foreign tax credit is generally limited to the lower of the foreign tax paid and the Dominica tax attributable to the foreign income. A taxpayer facing treaty-based double taxation can seek a mutual agreement procedure, normally within a three-year period and without a fee. Financial institutions also have automatic-exchange obligations for reportable jurisdictions under CRS. FATCA-registered financial institutions had a 30 April 2026 deadline for the 2024 return. Country-by-country reporting is governed by the Income Tax (Country-By-Country) Reporting Act 4/2025.