Grenada: Proposal requiring nonresident digital services providers to register for VAT
Proposed changes would expand Grenada's VAT regime to apply to digital services supplied by nonresident providers to consumers in Grenada.
The Grenada Attorney General on April 24, 2026, published the Value Added Tax (Amendment) Bill 2026, proposing amendments to expand the scope of Grenada’s VAT regime to expressly apply to digital services supplied to consumers in Grenada, including services provided by nonresident suppliers.
Key features of the proposed amendments
Scope
The regime would apply to digital services, defined as services supplied through the internet or an electronic network that are primarily automated, involve minimal human intervention, and rely on information technology for execution.
These services include streaming and on‑demand content services; online advertising and digital marketing services or platforms; cloud computing, hosting, and data storage services; electronically supplied software, applications, and software‑as‑a‑service (SaaS); automated online learning platforms and pre‑recorded educational content supplied electronically; digital products supplied electronically; and any other electronically supplied services as may be prescribed by regulations.
Business‑to‑business (B2B) vs. business‑to‑consumer (B2C)
The proposed regime is B2C. When digital services are supplied by a nonresident supplier to a VAT‑registered person in Grenada for use in the course or furtherance of a taxable activity, the Grenada VAT‑registered recipient would be required to account for the VAT under a reverse‑charge mechanism, unless otherwise prescribed.
Customer location
To determine whether a digital service supply is made to a consumer in Grenada, a consumer would be treated as located in Grenada when two or more indicators identify the consumer as being in Grenada. Indicators include the consumer’s billing address, the Internet Protocol (IP) address assigned to the consumer, the location of the bank or financial account used by the consumer, or any other indicator that may be prescribed by regulations.
Marketplace/platform rules
The bill introduces deemed‑supplier rules for electronic marketplaces. An operator of an electronic marketplace would be treated as the supplier of digital services for VAT purposes when the marketplace:
- Processes or authorizes payment for the supply
- Sets the terms and conditions of the supply
- Facilitates delivery of the service
This treatment would apply regardless of whether the underlying supplier is resident or nonresident, and irrespective of where the electronic marketplace is established.
The electronic marketplace operator would not be treated as the supplier when:
- The underlying supplier is VAT registered in Grenada and accounts for the VAT due on the supply
- The supply is made through a nonresident agent or representative to whom VAT liability is expressly attributed under the law
In such cases, the underlying supplier or resident agent would remain solely responsible for VAT compliance.
Registration
Under the bill, a nonresident supplier making a taxable supply of digital services to consumers in Grenada would be required to register for VAT. The bill does not include any details regarding a registration threshold; however, the VAT law itself includes a domestic registration threshold of XCD 120,000.
Registration may be completed under a simplified registration regime, to be prescribed by regulations, or under the standard registration provisions set out in Part III of the VAT law.
VAT invoicing
The bill does not include any specific provisions addressing invoicing requirements. However, the VAT law only imposes a VAT invoicing requirement on sales to VAT registered recipients. Therefore, nonresident digital services providers would likely not be required to issue VAT invoices.
Penalties
Penalty provisions in the general VAT law would apply.
Implementation timeline
The bill would come into effect on a day to be fixed by the Minister by Notice published in the Official Gazette. However, the bill includes a six-month transition period for nonresident digital services providers and electronic marketplaces.
Contact us
For more information, contact a KPMG tax professional:
Philippe Stephanny | philippestephanny@kpmg.com
Chinedu Nwachukwu | chinedunwachukwu@kpmg.com
Marianne Greenidge | mariannegreenidge@kpmg.bb