In Curaçao, employers shoulder a significant portion of social security contributions.

Social Security Contributions

• Old Age Insurance (AOV): Employers contribute 9% of the employee's gross salary to this scheme, which provides pensions to employees upon retirement.
• Surviving Dependents Insurance (AWW): This insurance, which provides financial support to surviving dependents in the event of an employee's death, requires a 0.5% contribution of the employee's gross salary from the employer.

Health Insurance Contributions

Employers also contribute to various health insurance programs:

• Basic Medical Insurance (BVZ): Employers contribute 9.3% of the employee's gross salary to this scheme, which covers basic medical expenses.
• General Insurance for Exceptional Medical Expenses (AVBZ): This scheme, which covers high-cost medical expenses, requires a 0.5% contribution of the employee's gross salary from the employer.

Other Mandatory Contributions

• Accident Insurance (OV): The contribution rate for this insurance varies between 0.5% and 5% of the employee's gross salary, depending on the risk level associated with the employee's work.
• Loss of Income Due to Illness Insurance (ZV): Employers contribute 1.9% of the employee's gross salary to this insurance, which partially covers lost income in case of employee illness.

Important Considerations

• Contribution Limits: There are maximum income thresholds for some of these contributions. It's essential to consult current regulations for specific limits.
• Reporting and Payment: Employers are responsible for withholding and remitting employee contributions as well as paying their own required employer contributions to the Social Insurance Bank (SVB).

In Curaçao, the income tax system is progressive. The current tax rates are as follows:

• Up to ANG 34,889: 9.75%
• ANG 34,889 to 46,519: 15.0%
• ANG 46,519 to 69,779: 23.0%
• ANG 69,779 to 98,853: 30.0%
• Over ANG 98,853: 38.0%

In addition to these rates, a surtax of either 25% or 30% is applicable to income tax, resulting in slightly higher overall rates.

Social Security Contributions

Employees in Curaçao make the following social security contributions:

• Old Age Insurance (AOV): 6.5% of gross salary.
• Surviving Dependents Insurance (AWW): 1% of gross salary.
• Loss of Income Due to Illness Insurance (ZV): 1.3% of gross salary.

Other Deductions

Contributions to pension plans may be deductible under certain circumstances.

Important Considerations

Some contributions have maximum income thresholds. It's essential to stay informed about current caps. Also, it's the employer's responsibility to withhold income tax and social security contributions from employees' salaries.

In Curaçao, the Value-Added Tax is known as "Omzetbelasting" (OB), with a standard rate of 9%. However, certain services might be eligible for reduced rates or exemptions.

VAT Liability for Services

Determining if your services are subject to VAT in Curaçao involves considering the following:

• Place of Supply: Services are generally taxable in Curaçao if the "place of supply" is deemed to be within Curaçao. Various rules exist to determine the place of supply depending on the type of service.
• Type of Customer: The VAT treatment may differ depending on whether you're providing services to a business (B2B) or a consumer (B2C).
• Type of Service: Certain services may be exempt from OB, while others might be taxed at a reduced rate.

Important Categories of Services

• Imported Services: Services provided by a non-resident to a business established in Curaçao are usually subject to the "reverse charge" mechanism. The Curaçao business effectively becomes responsible for reporting and paying the OB.
• Electronically Supplied Services: Providing electronic services (e.g., software downloads, streaming content) to consumers in Curaçao typically triggers OB liability.
• Professional Services: Services like consulting, legal, and accounting are generally taxable at the standard OB rate when the place of supply is Curaçao.

VAT Registration and Reporting

• Registration Threshold: If your taxable services in Curaçao exceed a specific threshold, you're generally required to register for OB.
• Filing and Payment: OB returns must be filed periodically (usually monthly or quarterly), along with the corresponding tax payments.

Special Considerations

• Exemptions: Certain categories of services, such as financial and healthcare services, might be exempt from OB.
• Zero-Rating: Some services may be zero-rated. This means you don't charge OB to your customer, but you can still claim back OB incurred on related expenses.

Curaçao, a Caribbean island, offers a variety of tax incentives to attract and promote business investment. These incentives can significantly reduce a company's tax burden, making Curaçao an attractive destination for both local and international businesses.

General Tax Incentives

The general corporate tax rate in Curaçao is 22%. However, several tax incentives can reduce this rate for qualifying businesses. Curaçao operates a territorial tax system, meaning that only income generated within Curaçao is subject to corporate tax. Foreign-sourced income is generally exempt from taxation. Businesses can depreciate business assets at an accelerated rate, which can reduce taxable income in the early years of operation. Companies can claim an investment allowance of 10% of the total investment in new business assets.

Specific Tax Incentives

Newly incorporated companies that contribute to broadening the local economic base may be eligible for a "tax holiday." This can include exemptions from import duties, income tax on dividends, and property tax, as well as a reduced corporate tax rate of 2% or in certain cases up to 15%. Companies engaged in certain land development activities and investing at least ANG 2 million can benefit from incentives for up to 15 years. These include a minimum 2% tax rate, individual income tax exemption for profit distributions, import duty exemption for construction materials, and land tax exemption. Businesses engaged in specific activities, such as construction, call centers, service centers, data centers, and investment institutions, can benefit from a reduced corporate tax rate of 3%. Investment funds that meet certain criteria can be exempt from corporate tax. Private foundations (Stichting Particulier Fonds or SPF) are exempt from profit tax.

Economic Substance Requirements

Curaçao has economic substance requirements in place to ensure that companies taking advantage of tax incentives have a genuine presence in the country and are not simply using it as a tax haven. These requirements typically involve having a physical office in Curaçao, hiring local employees, and conducting a significant amount of business activity in the country.