Netherlands Antilles Personal Taxation

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The main tax applied to individuals in Curaçao is income tax, which is collected by employers under a 'PAYE'-style scheme along with social security contributions. Capital gains tax does not apply to individuals; but there are inheritance and gift taxes, and some relatively minor property taxes. Import duties are significant, and apply to many goods and commodities. There is a sales tax on most goods and services (5% at the time of writing).

Curaçao Residence and Liability for Taxation

For taxation purposes, an individual is either resident or non-resident, and nationality is not a factor in determining tax status. Residence for tax purposes is determined by taking into account the location of an individual's permanent home, their habitual place of actual residence, and their centre of economic and social interest. Residents are taxed on their world-wide income under the following headings:

Income from a business or profession;
Income from employment;
Income from property (real estate);
Income from capital;
Certain periodic receipts.

Fringe benefits are mostly taxable, including housing allowances and reimbursement of taxes. Capital gains are not taxed unless the gain results from business activity, or unless it results from the sale of shares of a company of which the individual concerned, together with certain specified types of relative, owns or has owned 25% or more in the last 5 years.

Non-residents are taxed on certain specified types of income arising in the Netherlands Antilles, including the following:

Income from a business or profession carried on within the islands personally or through a representative or agent (activity lasting less than three months may be exempted);
Income from employment (if such lasts less than three months, there is the possibility of an exemption, but this is seldom granted);
Income derived from a position as manager or director of a Netherlands Antilles comnany;
Income derived from property (real estate) in the Netherlands Antilles, or from a mortgage on such property.Note however that there is no withholding tax in the Netherlands Antilles.

All individuals are entitled to various deductions, up to specified limits, including:

business expenses, such as moving and travel expenses, entertainment expenses, and automobile expenses;
medical expenses;
life insurance and pension plan payments;
charitable contributions;
interest;
social security contributions; and
alimony.

Tax credits on foreign income are not accepted unless they are covered by a specific tax treaty. Foreign taxes actually paid as such are however deductible.

There are some fairly minor allowances for children.

Curaçao The 'Penshonado' Tax Regime

Since 1987 (with amendments in 1997) Curaçao has offered a favourable personal tax regime for retired people. The regime is available on the following conditions:

The "penshonado" should be at least 50 years old on the date that he registers himself as a resident;
The pensioner should not have lived in the Netherlands Antilles in the five years before making the application for 'penshanado' status;
The pensioner must own a house in the Netherlands Antilles with a value of at least US$253,000 for his personal use and available to him within 18 months after his registration as a resident;
The application for favourable tax treatment must be filed within two months after registration as a resident;
The "penshonado" has to provide employment to at least one employee for not less than 30 hours per week.

A "penshonado" may choose between two tax regimes:

Worldwide income, not derived from business or employment within Curaçao, including pension-rights of which at least 70% are externally funded, can be taxed at a flat 10% rate; or

All foreign income will be fixed at US$281.000 and taxed at the normal progressive rates, which amounts to an effective tax of US$152.000).

Foreign income is considered to be all income from a foreign source, including non-resident (so called "offshore") companies established in Curaçao, all income from savings at local banks; and the rental-value of the house owned by the penshonado.

"Local" income is all income that the penshonado receives from employment in a company established in Curaçao in which he owns 40% or more of the capital stock and/or income obtained as a director or officer of a company and/or income received from bonds issued by a local company. Local income is taxed at the normal tax-rate for local citizens. The penshonado may not enter into employment with a company in which he does not own at least 40% of the capital-stock.

Curaçao Rates of Income Tax

Income tax is imposed on a progressive basis on taxable income; up to 38% since 2009.

Income from 'substantial business interests' (meaning from a company in which an individual has a minimum 5% shareholding) is taxed at a fixed rate of 19.5%.

Curaçao Inheritance and Gift Taxes

Inheritance and Gift taxes are levied on residents of the Netherlands Antilles at rates up to 24% (at the time of writing).

Curaçao Real Estate Taxes

There are real estate taxes on Curacao: 0.3% per annum is currently on the value of undeveloped and built up land. There is a 15% municipal surcharge on the amount due. A 4% transfer duty applies to the transfer of immovable property located in Curaçao. There is also an annual occupancy tax of 5% of rental value.

Curaçao Import Duties

Import duties cover a range of goods and commodities with rates up to 28% (at the time of writing) on the c.i.f. value. Some sample rates are as follows:

Tourist items and certain foodstuffs, including fresh chicken, sardines, milk, cheese, pearls, watches, gold coins, perfumes, confectionery, cameras: up to 3%;
General goods, including clothing and some food staples: 11.5%;
Semi-luxury goods, including flowers, playing cards, washing machines: 18%;
Luxury goods, including mirrors, pianos and air conditioners: 28%.

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Lowtax Jurisdictions

Curaçao: Personal Txation