CuraçaoTax Obligations Detailed

In Curaçao, employers shoulder several tax obligations, encompassing payroll taxes and corporate income tax.

Payroll Taxes

• Old Age (AOV) Insurance: 9.0% of employee's salary up to ANG 100,000.
• Surviving Dependents (AWW) Insurance: 0.5% of employee's salary up to ANG 100,000.
• Basic Health Care Insurance (BVZ): 9.3% of employee's salary up to ANG 150,000.
• Accident Insurance (OV): 0.5% to 5% of employee's salary, depending on the risk level of the industry.
• Insurance for Loss of Income Due to Illness (ZV): 1.9% of the employee's salary up to ANG 81,229.20
• General Insurance for Exceptional Medical Expenses (AVBZ): 0.5% of employee's salary up to ANG 574,189.07.

Corporate Income Tax

• Standard Rate: 22%
• Reduced Rate (specific sectors): 3% for income from aircraft building and improvement, administrative and back office services, warehousing and logistics services, and fund management services (subject to certain conditions).
• Reduced Rate (E-Zone companies): 15% for taxable income up to ANG 500,000, with the excess taxed at the standard 22% rate.

Tax Filing and Deadlines

• Tax Year: Calendar year (January 1st to December 31st).
• Filing and Payment: Tax returns and payments for payroll taxes, profit tax, and turnover tax are typically due within specified periods, some potentially submitted via an online portal depending on the number of employees/directors.
• Income Tax Return: The deadline for filing is typically two months after the tax form is received or the invitation to file is issued.

Other Considerations

• 2025 Tax Tables: Updated income and payroll tax tables for 2025 will incorporate adjustments based on the latest consumer price index.
• Pillar Two Implementation (2025): A minimum top-up tax regime under the OECD's Pillar Two framework will be implemented starting in 2025.

It's important to consult with a tax advisor for personalized guidance and to stay updated on the latest regulations, as tax laws and deadlines are subject to change.

In Curaçao, employee tax deductions encompass various areas, including income tax, social security contributions, and other specific deductions.

Income Tax

Individual income tax in Curaçao is progressive, meaning higher earners pay a higher percentage of their income in taxes. As of 2025, the tax brackets and rates are as follows:

• Up to ANG 38,225: 9.75%
• ANG 38,226 to ANG 50,968: 15%
• Income above ANG 50,968: 23%, 28%, and 34% (exact thresholds yet to be confirmed for 2025, but they will fall within this income range.)

Social Security Contributions

Both employers and employees contribute to the social security system. The exact percentages and thresholds for 2025 are still to be confirmed by official sources. Check with the Curaçao Ministry of Finance for updated information.

Other Deductions

Several other deductions may apply, depending on individual circumstances:

• Pension Contributions: Contributions to recognized pension schemes are typically tax-deductible.
• Alimony Payments: Alimony or spousal support payments might be deductible.
• Study Loan Interest: Interest paid on student loans may be deductible up to a certain limit. Verify the latest regulations with official tax authorities.

Expatriate Status

Employees who haven't worked in Curaçao for at least five years and earn at least ANG 150,000 annually may qualify for "expat status." Benefits include tax-free allowances for benefits in kind (up to ANG 15,000 annually), school fees, and house rent.

Employer Obligations

Employers in Curaçao have several tax obligations, including withholding income tax and social security contributions from employee salaries and remitting these to the tax authorities. Deadlines and filing procedures vary depending on the type of tax and the size of the business. Some key deadlines from previous years include annual sales tax return by January 15th of the following year and quarterly sales tax return (for those eligible) by the 15th of the month after quarter-end. Always verify the most current deadlines provided by the Curaçao Ministry of Finance. Additionally, employers must file payroll summaries, typically by November 1st for the preceding year, even if they no longer have employees or are inactive. Failure to comply with tax obligations may result in penalties.

Tax Filing

Individual taxpayers must file an annual income tax return. The deadline is typically two months after receiving the tax form or an online filing invitation. Businesses generally must file tax returns electronically. As of February 5, 2025, the exact filing frequency for sales tax has been clarified: annual filing for turnover under ANG 30,000, quarterly for turnover between ANG 30,000 and ANG 75,000, and monthly for turnover exceeding ANG 75,000.

Global Minimum Tax (Pillar Two)

Curaçao plans to implement a global minimum tax of 15% for large multinational enterprises (MNEs) with consolidated revenue of at least 750 million euros, starting from December 31, 2024. This follows the OECD's Pillar Two framework.

It is crucial to consult with a tax advisor or the Curaçao tax authorities for the most up-to-date and detailed information specific to your situation. Tax laws and regulations are subject to change, and this overview is current as of February 5, 2025.

In Curaçao, businesses collect sales tax, not VAT, on goods and services.

Sales Tax in Curaçao

Sales tax is levied on most goods and services in Curaçao. Several rates and exemptions exist.

Sales Tax Rates

• Standard Rate: 6% applies to most goods and services.
• Higher Rates: 7% for insurance and short-term accommodation rentals for tourists and 9% for certain goods and services (luxury items, motor vehicles, alcohol, tobacco, cinemas, gambling, fast food, mobile food vendors, and hospitality services).

Registration

• Businesses operating in Curaçao and generating revenue from goods or services are generally required to register for sales tax.
• Businesses can request an exemption if their annual turnover is below ANG 30,000 (Netherlands Antillean Guilders), excluding certain real estate activities.

Filing and Payment

• Sales tax returns are typically filed monthly, due on the 15th of the following month.
• Quarterly filing is possible if sales tax revenue does not exceed ANG 10,000 over three months.
• Annual filing might be permitted under certain conditions if revenue is below ANG 30,000.

Exemptions

• Basic foodstuffs (e.g., bread, eggs)
• Real estate
• Power and water
• Medical services

Other Taxes in Curaçao

Besides sales tax, other indirect taxes applicable in Curaçao include:

• Real estate transfer tax (4%)
• Real estate tax (land property tax)
• Excise taxes
• Stamp duty
• Registration duty

Penalties

Curaçao imposes penalties for non-compliance with sales tax regulations, such as late filing or non-payment. Penalties can reach up to ANG 10,000.

E-Zone Tax Regime

Businesses operating within the Curaçao E-Zone benefit from a reduced corporate income tax rate of 2% (until the end of 2025), along with exemptions from turnover tax, import duties, export duties, sales tax, and excise duties. Administration must be conducted within Curaçao, requiring the appointment of a local accountant for financial statement preparation and tax filing.

As of today, February 5, 2025, this information is current, but regulations are subject to change.

Curaçao offers a variety of tax incentives to attract investment and stimulate economic growth.

General Tax Incentives

• Territorial Tax System: Curaçao primarily taxes profits generated through "domestic enterprise," focusing on activities conducted within the country using assets associated with Curaçao. Foreign-sourced income is generally exempt, provided the company maintains a substantive presence in Curaçao, including qualified employees and appropriate operational costs.
• Investment Allowance: A 10% investment allowance is available for investments in tangible fixed assets. However, it does not apply to land investments. If the assets are later sold, a disinvestment addition is included in the taxable income for the year of the sale.
• Participation Exemption: A 100% exemption applies to dividends and capital gains earned by a Curaçao holding company from a substantial shareholding (at least 5% ownership or an acquisition cost of at least ANG 890,000/USD 500,000). For dividend income, the subsidiary must be subject to a tax of at least 10% or be an active business company.
• Tax Deferral/Exemptions: Retirement contributions for pensions are tax-deductible. Profits and losses from permanent establishments abroad, income from foreign real estate, and specific company mergers or stock mergers may also qualify for tax exemptions.

Specific Tax Incentives and Regimes

• Tax Holiday: Newly established companies contributing to the local economy may qualify for a tax holiday of 5 to 11 years. This can include exemptions from import duties, income tax on dividends, and property tax, along with reduced corporate tax rates (potentially as low as 2%). Minimum investment requirements apply (ANG 250,000/USD 140,000 generally, ANG 1,000,000/USD 555,000 for hotels and similar businesses).
• International Shipping Company Regime: Companies exclusively operating ships can opt for tonnage tax, calculating profit based on ship tonnage instead of actual profit. Registration in the tonnage tax register is required.
• Export Regime: Incentives are available for companies whose activities are primarily export-oriented.
• E-Zone: Companies operating within designated E-Zones and primarily exporting services can benefit from a reduced 2% corporate income tax rate and exemptions from various other taxes (e.g., turnover tax, import/export duties). They are required to maintain operations and administration in Curaçao and appoint a local accountant. This regime's availability extends until the end of 2025. As of February 5, 2025, it is uncertain whether this will be further extended.
• Expatriate Regime: Skilled employees hired from abroad or seconded to Curaçao with specific expertise not readily available locally may qualify for this regime. Benefits include exemptions for specific salary components and fringe benefits, along with an exemption from grossing up net salaries. This regime applies for a maximum of 5 years, extendable to 10 years. Requirements include a higher education degree, at least 5 years of work experience, and a minimum annual gross salary of ANG 150,000/USD 83,500.

Other Relevant Tax Information

• Pillar Two Implementation: Curaçao is implementing the OECD's Pillar Two framework, introducing a global minimum tax of 15% for multinational enterprises with annual revenue exceeding EUR 750 million (USD 778 million), effective for financial years beginning on or after December 31, 2024. This includes a domestic minimum top-up tax (DMTT) and an income inclusion surcharge.
• Property Development Tax Exemption: Relaxed conditions for this exemption, including a temporarily reduced foreign investment requirement (currently 50% through requests submitted until December 31, 2025), have been extended. Further extensions beyond this date are unknown as of February 5, 2025.

It is important to consult with a tax professional for personalized advice on your specific situation and stay updated on the latest regulations, as tax laws and incentives can change. This information is current as of February 5, 2025, and may be subject to change.