Grenada VAT Guide: 15% Standard Rate, 0% Exports 2026

Q: What is the penalty for late VAT filing?

Penalties start at XCD 500 for the first month of delay. Interest on late payment accrues at 1% per month.

Q: Are digital services subject to VAT?

Yes. Digital services from non-residents to Grenadian consumers are subject to 15% VAT. Non-resident providers may register under a simplified regime.

Grenada applies Value Added Tax (VAT) at a standard rate of 15%, with a 0% rate for exports and certain basic food items. The VAT system is modeled on the UK/VAT model and is administered by the Inland Revenue Division. Here is how Grenadian VAT works in 2026.

VAT in Grenada is governed by the Value Added Tax Act and is administered by the Inland Revenue Division. Businesses with annual taxable turnover exceeding XCD 360,000 must register for VAT. Small businesses below this threshold may voluntarily register. VAT returns are filed monthly or quarterly depending on turnover. Corporate tax overview →

Real-world example: A St. George's hotel charges XCD 2,000 per night for a 5-night stay. VAT at 15% = XCD 1,500, total invoice XCD 11,500. A restaurant meal of XCD 100 includes VAT at 15% = XCD 13.04. An export sale of nutmeg worth XCD 50,000 to a US buyer is VAT-rated at 0%, allowing the exporter to reclaim input VAT on related costs. Cross-border VAT rules →

VAT Rates in Grenada

15% (standard rate): Most goods and services including accommodation, restaurants, retail, professional services, electronics, clothing, and consumer goods
0% (zero rate): Exports of goods, international transport, basic food items (bread, rice, flour, milk, eggs, vegetables), agricultural inputs, and supplies to approved enterprises under the Fiscal Incentives Act
Exempt: Financial services (banking, insurance), education, healthcare, residential rent, and postal services

The zero rate on basic food items helps reduce the cost of living. The zero rate on exports ensures Grenadian exporters remain competitive internationally.

VAT Registration

Mandatory registration: Annual taxable turnover exceeds XCD 360,000
Voluntary registration: Businesses below the threshold may opt to register
Non-resident registration: Foreign businesses supplying taxable goods or services in Grenada must register
Group registration: Related entities may apply for group VAT registration

Registration is done through the Inland Revenue Division. VAT numbers follow a standard format. Failure to register when required can result in penalties and back-tax assessments.

VAT Compliance and Filing

Filing frequency: Monthly for businesses with turnover above XCD 2 million; quarterly for smaller businesses
Filing deadline: By the 15th of the following month (monthly filers) or by the 15th after the quarter ends (quarterly filers)
Payment deadline: Same as filing deadline — VAT due must be paid by the 15th
Electronic filing: VAT returns can be filed electronically through the IRD online portal
Records: Businesses must maintain VAT invoices, receipts, and accounting records for 6 years

Late filing incurs penalties. Late payment incurs interest at the statutory rate. The IRD conducts VAT audits and cross-checks returns.

VAT Invoicing

VAT-registered businesses must issue tax invoices for all taxable supplies. Key requirements:

Tax invoices must include seller/buyer details, VAT registration number, date, description, amount, VAT rate, and VAT amount
Simplified invoices are allowed for retail sales under XCD 500
Credit notes and debit notes must be issued for adjustments
Invoices must be issued in East Caribbean Dollars (XCD)

Can non-resident businesses reclaim Grenadian VAT?

Yes. Non-resident businesses not registered for VAT in Grenada may reclaim VAT incurred on business expenses through a refund procedure. Reciprocal arrangements apply for businesses from countries with mutual VAT refund agreements.

What is the penalty for late VAT filing?

Late VAT filing penalties start at XCD 500 for the first month and increase for continued non-compliance. Interest on late payment accrues at 1% per month. Repeated violations may result in increased penalties and registration suspension.

Are digital services subject to VAT?

Yes. Digital services provided by non-resident companies to Grenadian consumers are subject to 15% VAT. Non-resident digital service providers may need to register for VAT in Grenada under a simplified registration regime.