INDIVIDUAL TAXATION

Resident individuals are taxed on their worldwide income. Married couples are assessed and taxed separately.

INCOME TAX

Income earned by non-residents is taxed at progressive rates. Each resident taxpayer can avail of the ECD18,000 (US$6,667) personal allowance.

The government plans to do the following over a three-year period, starting from the year 2008:

• Increase the personal tax-free allowance to ECD20,000 (US$7,407)
• Reduce the tax rate to 15% for the first ECD20,000 (US$7,407) of income
• Reduce the tax rate to 25% for income over ECD20,000 (US$7,407) but less than ECD50,000 (US$18,518)
• Reduce the tax rate to 35% on all income over ECD50,000 (US$18,518)

RENTAL INCOME
Rental income from residential properties is taxed at progressive income tax rates. Municipal taxes, maintenance costs, and accountancy fees incurred in the preparation of an income tax return are deductible against the amount payable.

Deductions on interest payments of up to ECD15,000 (US$5,556) are only allowed on owner-occupied property.

CAPITAL GAINS
There is no capital gains tax in Dominica.

PROPERTY TAX

Municipal Tax

There are no real property taxes in Dominica but there are municipal taxes levied on properties located in the cities of Roseau and Canefield. The tax rate is 11/4% (2.75%) levied semi-annually.