- Dominica tax system in 2025
- Dominica Tax System Overview
- 1. Personal Income Tax in Dominica
- How to pay Personal Income Tax in Dominica ?
- 2. Dominica Corporate Taxes
- 3. Withholding Tax
- 4. Value Added Tax (VAT)
- 5. Social Security Contributions
- 6. Property Transfer and Real Estate Taxes
- 7. Alien Landholding License Fee
- Tax Rules for Residents and Non-Residents
Dominica is a beautiful island country in the Caribbean Sea, known for its green mountains, waterfalls, and hot springs. It is often called the “Nature Island of the Caribbean” because of its clean environment and natural beauty. The people of Dominica are friendly, and English is the main language spoken, which makes it easy for foreigners to live and do business there. The country is safe, peaceful, and politically stable, making it a great choice for families and investors who want a calm place to live or invest. Dominica’s location between Guadeloupe and Martinique also gives easy access to other Caribbean islands and North America.
One of the biggest reasons investors are interested in Dominica is its simple and low tax system. The country has no tax on wealth, inheritance, foreign income, or capital gains, and the corporate tax rate is only 25%. This means you can do business or earn money abroad without paying extra taxes in Dominica.
Dominica is also well known for its Citizenship by Investment (CBI) Program, one of the most trusted programs in the world. By donating to the government fund or investing in approved real estate, investors can get Dominica citizenship and passport within just a few months which is 6 – 9 months. The Dominica passport allows visa-free travel to more than 143+, including the Singapore and the Schengen Area.
Dominica Tax System Overview
Dominica has a simple and low-tax system, making it one of the most attractive tax-friendly countries in the Caribbean. The country does not charge taxes on wealth, gifts, inheritance, foreign income, or capital gains, which makes it ideal for investors and residents looking for financial freedom. The tax filing deadline for self-employed individuals, tax residents, and companies is March 31 each year. All taxes in Dominica are paid in the Eastern Caribbean Dollar (XCD) the nation’s official currency.
Dominica is also well known for its Citizenship by Investment Program, one of the most trusted programs in the world. By donating to the government fund or investing in approved real estate, investors can get Dominica citizenship and passport within just a few months which is 6 – 9 months. The passport allows visa-free travel to more than 143+, including the Singapore and the Schengen Area. The list of taxes in Dominica is given below:
1. Personal Income Tax in Dominica
Dominica’s personal income tax rates range from 15% to 35%, as shown below:
| Annual Income Range (XCD) | Tax Rate |
|---|---|
| 0 – 30,000 | 0% |
| 30,001 – 50,000 | 15% |
| 50,001 – 80,000 | 25% |
| 80,001 and above | 35% |
In Dominica, when a company distributes dividends, it is required to pay a small withholding tax. However, individuals who receive these dividends are not subject to any additional tax on that income. Moreover, profits earned from the sale of real estate such as land or property are exempt from income and capital gains taxes. Taxpayers can also benefit from deductions on specific expenses, which are subtracted from their total income before determining the taxable amount.
How to pay Personal Income Tax in Dominica ?
Dominica operates both a monthly and an annual income tax system. Monthly tax is taken from the salary you earn every month. Your employer automatically deducts it from your paycheck and sends it to the Inland Revenue Division on your behalf. The payment must be made by the 15th of each month to stay compliant with tax regulations. This system makes it easier for employees, as the tax is handled directly by the employer.
If you are a tax resident whose only income comes from salaries, pay attention to the EC $30,000 threshold. Even if your annual salary is EC $30,000 or less, you are still required to file an annual tax return filing is mandatory, even if no tax is due. in case, your income exceeds EC $30,000, you may have additional tax obligations. usually the annual filing deadline is March 31 each year. please note that tax returns can be filed online through the Inland Revenue Division website on behalf your directly not by others.
To be a tax resident in Dominica, you need to do two things: first, get a Tax Identification Number (TIN), Tax code and, must live in Dominica for at least 183 days each year. This status determines your tax obligations and ensures you file your income tax correctly.
2. Dominica Corporate Taxes
Companies that are tax residents in Dominica are required to pay 25% corporate income tax on both their local and worldwide income. They must also contribute to Social Security for their employees. In addition, a 15% Value Added Tax (VAT) applies at the standard rate on goods and services. Corporate tax payments are due within three months after the end of the financial year (Dominica’s fiscal year ends on June 30). Alternatively, companies can pay in three quarterly installments of 25%, 30%, and 40% to spread out the tax burden.
Non-resident companies are taxed only on income earned within Dominica. They are also subject to a 15% withholding tax on income such as dividends, interest, rental income, and royalties. These are not included when calculating corporate tax.
If you want to set up an International Business Company (IBC) in Dominica, the process is fast usually about two weeks and can be completed remotely. The registration fee is around EC $2,100, and the annual maintenance cost is about EC $1,400. Social Security Contributions in Dominica are calculated as a percentage of employees’ salaries: the total contribution ranges from 14% to 14.25%. Employees pay 6.5%, while employers contribute 7.5% without redundancy insurance or 7.75% with redundancy insurance.
3. Withholding Tax
Withholding tax is applied when companies pay dividends, interest, rent, or royalties to non-residents. The tax rate is 15%, and it is deducted at the source, meaning the company takes it out before making the payment to the recipient.
4. Value Added Tax (VAT)
VAT is a consumption tax applied to most goods and services in Dominica. The standard rate is 15%, while a reduced rate of 10% applies to hotel accommodation and tourism-related services. Some essential goods, such as rice and oil, as well as certain services like healthcare, educational, financial, public transport like that those are either zero-rated or exempt from VAT.
5. Social Security Contributions
In Dominica, both employees and employers must contribute to the Dominica Social Security (DSS). Employees pay 6.5% of their salary, while employers contribute 7.5% without redundancy insurance or 7.75% with redundancy insurance. This makes the total contribution range from 14% to 14.25% of the employee’s salary.
Dominica Social Security (DSS) is a government program that provides financial protection and benefits to workers and their families. It is funded through contributions from both employees and employers. The DSS helps cover things like:
6. Property Transfer and Real Estate Taxes
When buying or selling property in Dominica, several fees and taxes apply. Buyers and sellers each pay a 2.5% stamp duty, and additional judicial and legal fees usually total around 1%–2% of the property value. Properties purchased under the Citizenship by Investment (CBI) program or with an Alien Landholding License (ALL) also include a contribution to the Insurance Fund, and for foreign investors outside the CBI program, the ALL fee is typically 10% of the property value.
There is no annual property tax for general property ownership. However, if you rent out your property, a 1% state duty is applied annually to finalize the lease agreement. When selling property, the 2.5% stamp duty is payable, but profits from property sales are not considered taxable income.
7. Alien Landholding License Fee
For foreign investors buying property in Dominica outside the Citizenship by Investment (CBI) program, an Alien Landholding License (ALL) is required. The fee is typically 10% of the property’s value, ensuring that foreign ownership is regulated and legally approved by the government.
Tax Rules for Residents and Non-Residents
In Dominica, non-residents are taxed only on income earned within the country, while residents must pay tax on all income earned locally, including any foreign income.
However, Citizenship by Investment (CBI) investors enjoy special benefits. They can choose between making a government donation or investing in approved real estate. The donation option is non-refundable and tax-free, while income from real estate investments, such as rental income, is subject to local tax. Any income earned outside Dominica remains tax-free, even for residents with dual citizenship.
Because Dominica allows dual citizenship, you can keep your original passport while enjoying the benefits of the Dominica passport, including visa-free travel to numerous countries and a favorable tax regime.
