Value Added Tax (VAT)
Value Added Tax Act 23/2009.
Value Added Tax (VAT) – Act 23 of 2009 - is a broad based tax on the consumption of goods and services in Grenada, by providing for the imposition and collection of a value added tax, and for related matters.
Registration
Businesses with annual taxable supplies in excess of $300,000.00 are required to register for the VAT.
A person, who is a promoter of public entertainment, or a licensee or proprietor of a place of public entertainment, is required to be registered whether or not the person exceeds the registration threshold.
Government Entities and Investors
A person who conducts more than one taxable activity, or who conducts one or more taxable activities through branches or divisions, must be registered in the name of the person and not in the names of the activities, branches, or divisions.
Who Pays the Tax?
The tax is inclusive in the price of goods and services therefore the tax is paid by consumers.
Can anyone charge VAT?
No. Only businesses that are registered for VAT with the Inland Revenue Division and display an original VAT registration certificate in a prominent position of the business.
VAT Registration Number/Taxpayer Identification Number
The Comptroller shall issue every registered person with a unique taxpayer identification number with additional digits for VAT purposes, to the number used to identify the registered person for the purposes of income tax or another taxes administered by the comptroller.
Forms and Notices
Forms, notices, returns, and other documents prescribed or published by the Comptroller for the purposes of the Act, may be in such form as the Comptroller determines for the efficient administration of the Act, and is valid whether or not published in the Gazette.
Forms, notices, returns, and other documents prescribed or published by the Comptroller for the purposes of the Act, may be in such form as the Comptroller determines for the efficient administration of the Act, and is valid whether or not published in the Gazette.
When is the tax due?
This tax is due at the end of every month but payable to the Inland Revenue Division by the 20th of the following month.
Rate of Tax
VAT is charged at the rate of 15% on most goods and services and 10% on hotel accommodation and dive operations. Some goods and services are also charged at the rate of 0%. There is a 20% tax on Cell Phones (talk and text).
VAT is charged at the rate of 15% on most goods and services and 10% on hotel accommodation and dive operations. Some goods and services are also charged at the rate of 0%. There is a 20% tax on Cell Phones (talk and text).
To whom is the tax payable?
This tax is payable to the Government of Grenada through the Inland Revenue Division (VAT Office).
This tax is payable to the Government of Grenada through the Inland Revenue Division (VAT Office).
VAT Returns and Payments
Returns
-
A taxable person shall lodge a VAT return for each tax period no later than 20 days after the end of the period.
-
A VAT return must –
-
be lodged with the Comptroller;
-
be in the form prescribed by the Comptroller; and
-
contain the information specified in that form.
-
Assessments
The Comptroller may make an assessment of the VAT payable by a taxable person if –
-
the Comptroller is not satisfied as to the accuracy of a VAT return lodged by the person;
-
the person fails to lodge a VAT return as required under this Act; or
-
the person has been paid a refund or allowed an input tax credit under Section 49 to which the person is not entitled.
VAT payable on Imports
The VAT payable by an importer to the Comptroller of Customs in respect of a taxable import is due and payable at the time of the import.
Interest
A person, who fails to pay VAT payable to the Comptroller or the Comptroller of Customs under this Act on or before the due date for payment, is liable to interest on the amount unpaid at the rate of 1.5% per month or part thereof, calculated from the date the payment was due to the date the payment is made.
A person, who fails to pay VAT payable to the Comptroller or the Comptroller of Customs under this Act on or before the due date for payment, is liable to interest on the amount unpaid at the rate of 1.5% per month or part thereof, calculated from the date the payment was due to the date the payment is made.
Offences
Civil Penalties -
Many tax penalties are substantial and can dramatically increase a tax bill. Penalties can be assessed for a variety of reasons. Some are due to taxpayer’s negligence/failure to pay attention to tax details. Other penalties are incurred due to the overstatement of deductions, the failure to report before the due date, and or missing or inaccurate information. Taxpayers may also be penalized for intentional acts of fraud.
Many tax penalties are substantial and can dramatically increase a tax bill. Penalties can be assessed for a variety of reasons. Some are due to taxpayer’s negligence/failure to pay attention to tax details. Other penalties are incurred due to the overstatement of deductions, the failure to report before the due date, and or missing or inaccurate information. Taxpayers may also be penalized for intentional acts of fraud.
Criminal Penalties -
Appeals
A person may, by notice in writing to the Comptroller lodge a notice of objection to a reviewable decision, requesting the Comptroller to reconsider his decision and giving reasons for the request. A person who is aggrieved by a decision of the Comptroller under section 106 on an objection against the reviewable decision may, by notice of appeal, appeal from the decision to the Appeal Commissioners.
A person may, by notice in writing to the Comptroller lodge a notice of objection to a reviewable decision, requesting the Comptroller to reconsider his decision and giving reasons for the request. A person who is aggrieved by a decision of the Comptroller under section 106 on an objection against the reviewable decision may, by notice of appeal, appeal from the decision to the Appeal Commissioners.
The Comptroller or the appellant may appeal to the High Court from any decision of the Appeal Commissioners which involves a question of law, including a question of mixed fact and law. A notice of objection or appeal against a reviewable decision does not suspend an obligation to pay –
-
any tax chargeable on a return or under an assessment; or
-
any penalty imposed under this Act; or
-
any interest imposed under this Act,
and the tax, penalty or interest may be recovered as if no such objection or appeal had been lodged.
Record-keeping and Information Collection
Every taxable person shall maintain in Grenada such accounts, documents, and other records, including records referred to in section 43, as required under this Act or under any Act dealing with the administration of this Act, and such accounts, documents, and the records must be maintained by the taxpayer for 7 years after the end of the tax period to which they relate.
Every taxable person shall maintain in Grenada such accounts, documents, and other records, including records referred to in section 43, as required under this Act or under any Act dealing with the administration of this Act, and such accounts, documents, and the records must be maintained by the taxpayer for 7 years after the end of the tax period to which they relate.