Here’s an overview of VAT (Value Added Tax) rates in Dominica:
VAT Rates in Dominica
| Category | VAT Rate | Notes |
|---|---|---|
| Standard Rate | 15% | Applies to most goods and services. |
| Reduced Rate | 10% | Applied to certain items such as hotel accommodation and some essential goods. |
| Zero-rated Supplies | 0% | Includes exports and international transport. |
| Exempt Supplies | Exempt | Includes certain financial services, medical services, and education. |
Detailed Explanation:
- Standard Rate (15%): This is the general VAT rate applied to the majority of goods and services in Dominica.
- Reduced Rate (10%): This rate is applied to specific items, including certain essential goods and hotel accommodation, to support the tourism industry.
- Zero-rated Supplies (0%): Exports of goods and international transport services are zero-rated, meaning VAT is not charged on these transactions, but businesses can recover VAT on related inputs.
- Exempt Supplies: Certain services, such as financial services, medical services, and education, are exempt from VAT in Dominica.
Additional Points:
- VAT Registration: Businesses must register for VAT if their taxable turnover exceeds the threshold set by the Dominica Inland Revenue Division.
- Economic Impact: The VAT system in Dominica is designed to support local economic activities while maintaining compliance with regional and international tax standards.
These rates and rules are managed by the Dominica Inland Revenue Division and may be updated periodically.