Changes in Curacao profit tax law

Curacao has once again introduced robust and fundamental changes in its profit tax law. This under influence of "Europe" that could not agree upon previous amendments.

The fundamental change is that Curacao has chosen to tax on the basis of territoriality. Meaning that only income generated in Curacao will be taxed with Curacao profit tax. There needs to be a link -a nexus- between the income and Curacao. Activities on Curacao soil or e.g. the lease of Curacao real estate will fall under the scope of the Curacao profit tax. Same goes for so-called passive income. So in case a Curacao based company has a Swiss bank account yielding (passive) income it will be deemed local income.
Income generated abroad will as a rule of thumb not fall under the scope of the Curacao profit tax.

There will be companies that shall generate local as well as foreign income. It goes without saying that evidence of the place or origin of that income shall be of the utmost importance.

When as a sole proprietor you generate foreign income you should convert to a company structure.

Some qualifying activities will be taxed against a profit tax rate of 3%

A new profit tax rate of 3% has been introduced for income from local enterprise for designated qualifying activities that take place in or from Curacao.

Mentioned activities are:
1      building and improving airplanes and ships, as well as repairing and maintaining airplanes and            ships with a length of at least 10 meters and machines, installations and material located in and            for use on board of these airplanes and ships;

2      services provided by call-, service-, or datacenters in so far as they provide support activities to          enterprises with an annual turnover of at least ANG 50 million  (USD 28 million);

3      services provided by warehousing companies; and,

4      services provided in or from Curaçao to non-related investment companies and managers of                investment companies.


Muller's tax take:
With the newest changes our tax legislation has been further modernized en will offer -specifically for entrepreneurs with a focus on outbound services and trade- quite interesting fiscal possibilities. Once again -as with any change in tax legislation- things have become more complicated. This makes that -if one has plans on starting or converting a business in Curacao- it seems wise to consult a qualified tax lawyer/consultant in an early stage.

Muller & Associates

Curacao

Schouwburgweg 3

Curacao, Dutch Caribbean

www.mullertax.com

Tel:     +599 9 737 49 16

                                

A REASONABLE FEE

 A man phones a lawyer and asks, "How much would you charge for just answering three simple questions?"
 The lawyer replies, "A thousand dollars."
 "A thousand dollars!" exclaims the man. "That's very expensive isn't it?"
 "It certainly is," says the lawyer. "Now, what's your third question?

So in our firm, we have long ago decided we did not want to become the object of jokes like these and we started working for fixed fees most of the time. As a tax lawyer you will always have a lot of recurring business for clients when it comes to filing income and profit tax returns on behalf of your clients and reviewing the client's company financials from a tax perspective with internal or external accountants. Our fixed fees make that clients feel comfortable working with us as they know that not every little phone call is billed. For us it gives the satisfaction of being able to establish much sounder relationships with our clients based on mutual trust. Cordiality and a sense of humor comes into play as well. We know that our clients come for us, the people you see on: www.mullertax.com and not so much for a brand name. It's the people that provide the service and not some fancy logo.

We work with standard fees when it comes to income and profit tax where the latter entails the discussions with the accountant with respect to draft financials. With respect to income tax drafting and filing of protest letter to the tax authorities is also included.




If you would like a fee offer with respect to you fiscal situation do not hesitate to contact us at: peter.muller@mullertax.com or give us a call at (**)5999 7374916

We can also assist you in finding a suitable accountant with respect to your bookkeeping services. In close cooperation with an independent accountant we may be able to lower your tax lawyer's and accountants fees with over 50% if you and your company are now being serviced by a big four firm.