Luxembourg vs Grenada — Tax System Comparison — Nomad Watch

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Overview

Overview
	LU Luxembourg	GD Grenada
Tax system	Worldwide	Territorial
Tax authority	Administration des contributions directes	Inland Revenue Division
Authority website	Visit	Visit
Data year	2026	2026

At a glance

At a glance
	LU Luxembourg	GD Grenada
Top personal income tax	42%	28%
Effective top rate	45.78%	28%
Corporate tax rate	16%	28%
VAT / GST	17% TVA	15% VAT
Tax system	Worldwide	Territorial
Tax treaties	88	1

Income tax

Income tax
	LU Luxembourg	GD Grenada
Top rate	42%	28%
Effective top rate	45.78%	28%
Capital gains tax	22.89%	—
Capital gains notes	Short-term gains on movable property (under six months) taxed at progressive PIT rates. Long-term gains on material participations (>10% held in the prior five years) taxed as extraordinary income at half the average rate (maximum 22.89% including solidarity). Real estate gains within five years of acquisition taxed at progressive rates; longer holding periods use reduced rates and allowances.	No separate capital gains tax; gains are taxed as ordinary income where they form assessable income.
Social security (employee)	12.95%	6.25%
Social security (employer)	13.02%	7.25%
Social security annual cap	$166,280	$62,400

Withholding rates

Withholding rates
	LU Luxembourg	GD Grenada
Dividends	15%	15%
Interest	0%	15%
Royalties	0%	15%

Other taxes

Other taxes
	LU Luxembourg	GD Grenada
Corporate tax	16%	28%
Inheritance tax	48%	—
Wealth tax	0.5%	—

Tax features

Tax features
	LU Luxembourg	GD Grenada
Personal income tax	Yes	Yes
Capital gains tax	Yes	No
Corporate tax	Yes	Yes
VAT / GST	Yes	Yes
Wealth tax	Yes	No
Inheritance tax	Yes	No
Exit tax	Yes	No
CFC rules	Yes	No
Digital services tax	No	No
Crypto-specific rules	No	No
Participation exemption	Yes	No
Territorial exemption	No	Yes

Special regimes

Special regimes
	LU Luxembourg	GD Grenada
Digital nomad tax regime	No	No
Non-dom regime	No	No

Active special regimes in Luxembourg

Impatriate tax regime

Active special regimes in Grenada

None recorded

Residency and filing

Residency and filing
	LU Luxembourg	GD Grenada
Residency threshold	183 days	183 days
Filing deadline	December 31	March 31
Automatic extension	No	No
Residency rules	Resident if domiciled or habitual abode is in Luxembourg. Employment income of non-residents is Luxembourg-taxable when work is exercised or salary is paid from Luxembourg; treaties typically exempt short stays under 183 days in a calendar year when remuneration is not borne by a Luxembourg entity.	Individual tax resident if physically present at least 183 days in the year of assessment, or if maintaining a permanent place of abode in Grenada with some physical presence, subject to Comptroller discretion on extended absences (Income Tax Act s.2). Residents remain taxed only on Grenada-source amounts.
Filing notes	Calendar-year tax year. Annual income tax returns for tax year 2022 onward are due by 31 December of the following year (replacing the earlier 31 March deadline). Payroll tax is withheld monthly; many employees settle through annual adjustment rather than a full return.	Income tax returns and balance due are generally due within 90 days after the end of the financial year (calendar year for most individuals: 31 March). Employees with only employment income may be taxed through monthly PAYE; those with assessable income above XCD 60,000 must file an annual return.
Exit tax details	Companies and individuals transferring assets, a business or tax residence abroad may trigger exit tax on latent gains (Article 38 LIR, ATAD-aligned). Payment may be deferred in up to five annual instalments only for qualifying EU/EEA transfers with mutual recovery assistance; otherwise tax is due on exit.	—
CFC rules details	CFC rules under Article 164ter LIR (ATAD): Luxembourg companies and permanent establishments include undistributed income of controlled foreign entities when tax is less than half the Luxembourg rate and arrangements are non-genuine.	—

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