NB:
The Netherlands Antilles as such ceased to exist
in October 2010. This page deals with Curacao,
the largest component of the jurisdiction, which
has taken its place in many respects.
On
December 29th, 1999, the Parliament of the Netherlands
Antilles passed new tax legislation known as
The New Fiscal Framework intended to improve
the jurisdiction's image as an Offshore Financial
Centre and to revitalise its financial services
industry. The legislation, which came into force
on 1st January 2002, removed the distinction
between 'onshore' and 'offshore' companies,
and simplified tax rates. Alongside the tax
legislation, a new corporate form was introduced
to allow offshore operations on a tax-exempt
basis: this is the NABV (Netherlands Antilles
Besloten Vennootschap), and it was expected
to supplant the offshore NV for many purposes
(see Offshore Legal and
Tax Regimes and Forms
of Company).
Curaçao
Scope of Profits Tax
Profits tax is imposed on
the world-wide income of all corporations resident
in Curaçao, which means, all those corporations
having their place of incorporation in the jurisdiction.
Foreign companies having their management and
control in the jurisdiction are also subject
to the tax, as are branches of foreign companies
in respect of their local income. Non-resident
companies (ie, companies incorporated and having
their management and control elsewhere) are
subject to the tax only on their income derived
from Curaçao.
BACK
TO TOP
Curaçao Rates of Profits Tax
Since
January 1, 2002, a rate of 30% of corporation
tax applies to all non-exempt companies, plus
a 15% municipal surcharge, making it an effective
rate of 34.5%. However, there are 'grandfathering'
rules for existing offshore companies until
2019.
A
participation exemption applies to dividend
and capital gains income if the Curaçao
company holds at least 5% (or 5% of the voting
rights) and the overseas subsidiary is subject
to a minimum tax of 10% or is an active business
company.
Curaçao Calculation of Taxable Base
Income is widely defined and includes capital
gains. Operating losses can be carried forward
for ten years (five years for IBC companies
and six years for shipping and aviation companies).
Companies which have been granted tax holidays
may carry forward losses from their first four
years indefinitely (six years for shipping and
aviation companies). There is no provision for
carry-back of losses.
As
a rule, tax and financial accounts in the Netherlands
Antilles are required to be identical. There
is no provision for group or consortium relief.
Inventory
valuation should be commercially justifiable;
subject to this requirement, both LIFO or FIFO
are acceptable.
Valuations
for tangible fixed assets can include incidental
costs of purchase; depreciation is normally
by straight-line over the useful life of the
asset, but reducing balance is also permitted.
One third first-year capital allowances are
available. Intellectual property assets can
be depreciated over their useful lives; goodwill
generated on purchase is depreciated over three
to five years
Charitable
donations between 1% and 3% of net income (after
carry-forward losses) are deductible.
Income
from foreign property (real estate) or from
subsidiaries whose profits are derived wholly
or almost wholly from foreign property is exempt
from taxation.
Dividends
received from other resident corporations are
not traditionally taxed (but tax is applied
to dividends received from offshore Netherlands
Antilles corporations). A participation of 5%
or more in the paid-up capital of a foreign
corporation means that normally-taxed dividends
from that corporation are taxed at 10% of the
usual rate. Under the NFF this rate is reduced
to 5%, and this is also the rate that will apply
to NABV companies.
There
are no 'cfc' rules: the undistributed income
of foreign subsidiaries is not taxed.
Vessels
for representative purposes, fines imposed by
the Court, expenses related to criminal acts,
bribes, office at home, travel, clothing, telephone
and Internet subscription and personal care
are not deductible.
But
gifts, food, beverages, representational expenses,
courses, musical instruments, audio equipment,
tools, and some office equipment for businesses
are 80% deductible.
It
is particularly important for businesses with
offshore companies to note that, from 2001,
it was no longer be possible to deduct the interest
paid to an offshore company.
Curaçao Filing Requirements and Payment
of Tax
The Government introduced a self-assessment
basis of taxation from 1997. Returns are filed
in respect of a calendar year and must be accomnanied
by full payment of the estimated tax due.
BACK
TO TOP
There are no withholding taxes in Curaçao
on interest, dividends, royalties or compensation
for personal services paid to non-residents.
Lowtax Network Portal
Front Page
Tax Jurisdictions
Featured Content
