Incentives Are Available for Micro and Small Businesses

The Ministry of Tourism, International Transport and Maritime Initiatives has been mandated in the 2022/23 FY Budget as the authority to provide the attainment of Fiscal Incentives for qualified micro and small businesses with a gross income of less than $250,000 per annum.

POLICY REGIME

  • The Fiscal Incentives Act, Chapter 84:51 and the Fiscal Incentives (Amendment) Act No. 3 of 2019 makes provision for support to manufacturers, agro-processors, ICT enterprises and other service providers.
  • Approved manufacturers policy to support the acquisition of equipment, machinery, packaging, and labeling materials used in production
  • The Income Tax Act, Chapter 67.01 and the Hotels Aid Act, Chapter 85:04, allow for the granting of incentives for hotel and resort development.
  • The Value Added Tax Amendment Act No. 4 of 2006 grants approved entities VAT exemption on capital imports up to the commencement of taxable activities.

 

AVAILABLE INCENTIVES PACKAGE

The government of Dominica offers fiscal incentives to qualifying Micro and Small enterprises to support their establishment, expansion, and continued operation within various sectors.

MANUFACTURING/ AGRO-PROCESSING AQUA-CULTURE, AND AGRICULTURAL SECTORS

Businesses involved in the manufacturing/ agro-processing aqua-culture, and agricultural sectors may be entitled to government incentives. The Government of Dominica offers a fiscal incentive package for investment in these areas that includes:

  • Duty-free importationof building material fixtures and fittings
  • Duty-free importationof equipment, machinery, appliances and spare parts, generators, commercial or specialized vehicles
  • Duty free importationof office equipment, machinery, and furnishings
  • Duty free importationof raw and packaging materials
  • Exemption from the paymentof VAT on capital imports up to the commencement of taxable activity
  • Corporate tax exemptionon qualifying expenditure for up to 15 years
  • Exemption from paymentof income tax on profits and dividends during a tax holiday.
  • Carrying over of lossesincurred during a tax holiday, after the cessation of the tax holiday.
  • Investment/Income tax credit with respect to capital expenditure related to the construction, acquisition, or improvement to an asset, if a tax holiday is not being enjoyed – 10% of expenditure in an assessment year but not greater than 50 thousand or 50% of tax liability. Tax credit can be carried over.
  • Approved Manufacturers - Exemption from the payment of Value Added Tax and import duty on equipment, machinery, packaging, and labeling materials used in production.
  • Duty free and VAT exemption on the importation of agricultural inputs, tools, and equipment.

 

TOURISM

The government of Dominica fully supports all tourism investments and has backed up their commitment with incentives being made available for their development and expansion that may include:

  • Duty-free importation of all building materials, fixtures, and fittings
  • Duty free importation of articles of hotel, furnishings, equipment, appliances, and operations vehicle
  • Exemption from payment of VAT on capital imports up to the commencement of taxable activity
  • Exemption from payment of corporate income tax
  • Unencumbered 100% profit repatriation
  • Exemption from the payment of withholding tax on relevant external payments
  • Duty-free importation of equipment and furnishings required for cosmetic and spa services

ICT sector

Companies involved in ICT sector and non-tourism related services may qualify for various incentives under the prescribed legislature. This includes:

  • Tax holiday for up to 15 years
  • 100% of profit repatriation
  • Import Duty exemptions on equipment, and machinery
  • Import duty exemption on office furniture, and furnishings
  • Exemption of Value-Added Tax (VAT) on the importation of capital items up to the commencement of taxable activity
  • Facilitated work permits for management
  • Exemption from the payment of withholding tax on selected external payments 
  • Exemption from payment of income tax on profits and dividends during a tax holiday.
  • Carrying over of losses incurred during a tax holiday, after the cessation of the tax holiday.

 

RENEWABLE ENERGY

  • Import duty exemption on renewable equipment, machinery, and accessories
  • Import duty and VAT exemption on the importation of electric vehicles
  • Tax holiday for up to 15 years
  • 100% of profit repatriation
  • Exemption of Value-Added Tax (VAT) on the importation of capital items up to the commencement of taxable activity
  • Exemption from the payment of withholding tax on selected external payments 
  • Exemption from payment of income tax on profits and dividends during a tax holiday.
  • Carrying over of losses incurred during a tax holiday, after the cessation of the tax holiday.

 

THE PROCESS OF APPLYING FOR A FISCAL INCENTIVES License

The Small Business Support Unit is here to facilitate micro and small enterprises in applying for a Fiscal Incentives License. Applications from micro and small enterprises are submitted to the Small Business Support Unit of the Ministry of Tourism, International Transport and Maritime Initiatives, which makes recommendations on the level and types of incentives that should be granted under the specific license.

This allows for flexibility based on the needs of each business. 

The application process is non-discriminatory. Any micro and small enterprise can apply for incentives. 

Follow these basic steps.

Step 1.        Application form along with relevant supporting documents are submitted to the Permanent Secretary, Ministry of Tourism, International Transport and Maritime Initiatives ;

Step 2.        Application is reviewed and processed by the Small Business Support Unit;

Step 3.        Recommendation for the Fiscal Incentives License (including eligibility and/or quantum of incentives to be granted) is submitted to Cabinet for consideration;

Step 4.        Decision is submitted by Cabinet to the Small Business Support Unit;

Step 5.        The Small Business Support Unit informs the client of Cabinet’s decision.

Step. 6        The client submits relevant documents for the implementation of the incentives (for example, master list of imports)

 

The team at the Small Business Support Unit is here to assist you with the process for obtaining Fiscal Incentives. Click here to make an appointment with one of the Business Development Officers.

 

TAX INFORMATION FOR INDIVIDUALS, COMPANIES AND ORGANISATIONS

  • Companies and individuals residing in Dominica are subject to taxes on their income.
  • Detailed information can be found on the Inland Revenue Division's website - personal income tax, corporate income tax.

 

CAPITAL GAINS TAX

There is no capital gains tax in Dominica.

TAX RATES

Tax Rates:

Percentages

Corporate Tax

25%

Value Added Tax

15% on all goods & services

Value Added Tax

10% on Hotel Accommodation

Environmental Levy

1% or 1.5% (based on items)

Alien Land Holding Licence Fee

10% of the value of property

Customs Service Charge

4%

Excise Tax: Motor Vehicles

28%

 

Personal Income Tax:

Percentages

From $0 to %30,000

0%

From $30,001 to $45,000

15%

From $45,001 to $75,000

25%

From $75,001 and above

35%

 

Land Transfer Tax:

Percentages

Assurance Fund Fee

1% of value

Judicial Fee

2.5% of value

Stamp Duty (buyer)

4% of value

Stamp Duty (vendor)

2.5% of value

Solicitor’s Fee

3% of value on which a 15% VAT is payable

 

Dominica’s Laws which are useful to MSEs

The following laws are relevant to Micro and Small enterprises.

Company and registration information can be obtained from the Companies and Intellectual Properties Office

 

UNDERSTANDING CUSTOMS IN DOMINICA

The Customs and Excise Division of the Ministry of Finance is responsible for the control and management of the customs clearance of goods process. All goods imported into Dominica must be cleared through Dominica Customs.

The custom duties payable depends on the items being imported and whether an exemption has been granted. The custom duties include:

  1. Import duty,
  2. Value Added Tax,
  3. Customs Service Charge,
  4. Environmental Levy
  5. Excise Tax.

All imports must be accompanied by an import declaration (except for fresh fish taken by Dominican fishermen and imported by them in their vessels) in accordance with section 26(2)(a), and baggage in accordance with section 26(2)(b) of the Customs (Control and Management) Act. The importers must present a declaration to the Customs and Excise Division within:

  • Seven days after the goods have been landed for goods transported by air, in accordance with section 26 (1) (a) of the Customs Act.
  • Fourteen days after the goods have been landed for goods transported by sea, in accordance with section 26 (1) (b) of the Customs Act.
  • Import duties levied against goods are based on the cost, and freight (CIF) value and rates determined by the CARICOM Common External Tariff (CET).
  • Importers can find a list of the CET Rates at the Customs and Excise Division.

CUSTOMS FAQ

WHAT TYPE OF DUTIES ARE THERE?

General Imports are subject to five different types of duties, taxes and surcharges. Duties, taxes and surcharges levied on imports are:

  1. Import duty,
  2. Value Added Tax,
  3. Customs Service Charge,
  4. Environmental Levy
  5. Excise Tax..

WHERE CAN I FIND A CUSTOMS BROKER IN DOMINICA?

The facilitation of a Customs Broker is advisable at all time, this allows for same day clearing of your items. Click here to search for one.

WHERE CAN I GET MORE INFORMATION?

The emergence of Asycuda World has helped the clearance of goods to be hassle free.

WHAT ARE THE DUTIES ON VEHICLES?

  • 40% CIF Value
  • Excise tax - 28% CIF Value
  • VAT 15%
  • Customs Service Charge - 4% CIF Value
  • Environmental levy – 5 years and over EC$3,000, under 5 years 1% of CIF value

CAN NEW BUSINESSES GET A VAT OR DUTY EXEMPTION?

Yes. New business allow for VAT and duty exemption.

IS ANYTHING AUTOMATICALLY DUTY FREE?

Yes, renewable energy items, for example, are automatically duty free (see the Duty Free list for more information). There are also exemptions of duties on vehicles for agricultural purposes in Dominica. Manufacturers are exempted from the payment of import duty and VAT on packaging and labeling materials, and equipment and machinery used in the production of goods.

DUTY-FREE LIST

HOW QUICKLY DO I NEED TO PICK UP ITEMS FROM THE PORT IN DOMINICA?

Investor can keep item on the port for 7 days without paying any rental space.

WHAT ABOUT LOCALLY MANUFACTURED EXPORTS?

There are no major charges on locally manufactured exports. Manufacturers are exempted from the payment of import duty and VAT on packaging and labeling materials, and equipment and machinery used in the production of goods.

WHAT IS THE DUTY EXEMPTION PROCESS? HOW DO I GET IT?

Apply through The Small Business Support Unit (link  Application Form). If duty free exemptions are granted and approved by the Ministry of Finance the entity then submits a master list (also subject to approval by the Ministry of Finance) to Small Business Support Unit of all the goods and products they wish to import under the program.