ON OCTOBER 10TH, 2010 CURACAO BECAME AN AUTONOMOUS TERRITORY WITHIN THE KINGDOM OF THE NETHERLANDS.
RECENTLY THE AUTHORITIES OF THE NETHERLANDS AND CURACAO AGREED ON A NEW TAX TREATY TO BE ENTERED INTO BETWEEN THE NETHERLANDS AND CURACAO.
THIS NEW TAX TREATY WILL REPLACE THE CURRENT TAX TREATY FOR THE KINGDOM OF THE NETHERLANDS THAT ALSO COVERS THE OTHER OVERSEAS TERRITORIES OF THE KINGDOM OF THE NETHERLANDS.
THE NEW TAX TREAY BETWEEN THE NETHERLANDS AND CURACAO IS SCHEDULED TO BECOME EFFECTIVE ON JANUARY 1ST, 2013.
THE MAIN TAX AMENDMENTS FOR CORPORATIONS WILL BE AS FOLLOWS:
On October 12, 2011 the Parliament of Curacao approved new legislation introducing the Curacao trust (similar to the Anglo-Saxon trust). The trust legislation will enter into effect on the day following its publication in the official Curacao Gazette, i.e. shortly.
MAIN LEGAL FEATURES
MAIN TAX FEATURES
NOTE: Needless to say that with the introduction of the Curacao trust, the Curacao financial services industry is now able to offer to their worldwide clientele a pendant of the "Anglo-Saxon" trust for asset protection and individual tax planning purposes!
On September 15, the Parliament of Curacao approved a package of amendments of the Curacao tax laws aiming at mitigating the tax burden for both individuals and corporations. Most of the amendments will enter into effect in the fiscal year 2012. The most significant changes for the financial services industry are the following:
Private Foundation (SPF):
The SPF is exempt from profit tax provided it does not conduct a business. Under the new rules the SPF can elect to be regarded as a taxable business enterprise, thus being subject to a profit tax rate of 10% on both income and capital gains. This election for taxation enters into effect retroactively as from January 1, 2011. The election for taxation is valid for a period of 3 years.
Fiscal Transparency of N.V. or B.V.:
It will be possible to use the Curacao N.V. or B.V. as fiscal transparent entities. This implies that the N.V. and B.V. will be regarded as a partnership thus allocating the assets/activities/profit of the transparent entity directly to its shareholders where these profits will be taxed.
Reduction of profit tax:
The profit tax rate will be reduced from 34.5% to 27.5%.
Value Added Tax (VAT):
The rate will increase from 5% to 6%. In addition the exploitation of real estate located in Curacao will become subject to VAT, i.e. lease income from real estate. The lease of real estate as main residence is not subject to VAT.
2. TIEA Mexico: On February 4, 2011, the bilateral tax information exchange agreement between The Netherlands Antilles and Mexico has come into force. This agreement applies to Curacao, St. Maarten, Bonaire, St. Eustatius and Saba.
Changes of the Statute for the Kingdom of the Netherlands as per October 10, 2010
At present the Kingdom of The Netherlands comprises of 3 member states, i.e.
whereby the Netherlands Antilles comprise of 5 islands, i.e.
On September 9, 2010 it was decided that the following constitutional reform will be implemented on October 10, 2010:
This constitutional reform will not have any major effects on the current laws and regulations that are applicable to entities established in the Netherlands Antilles besides the fact that the name Netherlands Antilles will cease to exist and be replaced by the name Curacao.
Spain- Netherlands Antilles
On January 27, 2010 the bilateral Tax Information Exchange Agreement (TIEA) between The Netherlands Antilles and Spain came into force.
The TIEA has the following two major tax advantages:
1. As a direct consequence the Netherlands Antilles shall NOT be considered as a tax haven en thus The Netherlands Antilles shall be excluded from the Spanish "black list" of tax have jurisdictions.
2. The TIEA provides for the possibility to set up new corporate structures whereby dividends from countries in the European Union and dividends from non-EU countries with which Spain has concluded a bilateral tax treaty, can be distributed and received in a tax efficient manner. This means, under certain conditions, with zero income or withholding taxation.