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Curaçao - Indirect Tax Guide

Curaçao - Indirect Tax Guide

Explore the requirements and rules that apply to Indirect Taxes in Curaçao.

Explore the requirements and rules that apply to Indirect Taxes in Curaçao.

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General

Types of indirect taxes (VAT/GST and other indirect taxes).

Sales tax.

Are there other indirect taxes?

  • Real estate transfer tax.
  • Real estate tax (land property tax, onroerendezaakbelasting or OZB). 
  • Excise taxes. 
  • Stamp duty and registration duty.

What supplies are subject to VAT?

The Curaçao turnover tax, also known as Omzetbelasting (OB), is comparable with a sales tax.

Curaçao OB will in general be due in connection with the supply of goods, the rendering of services and the import of goods by certain manufacturers and entrepreneurs within the framework of their enterprise. The tax base is in principle the remuneration.

What are the standard or other rates (i.e. reduced rate) for VAT/GST and other indirect taxes?

  • Sales tax: 6 percent.
  • Insurance and accommodation: 7 percent.
  • Certain goods and services: 9 percent.
  • Real estate transfer tax: 4 percent.

Who is required to register for transfer tax?

None of the parties. The amount of real estate transfer tax due is collected by the notary public and paid by the notary public to the tax collector. The purchaser of the real estate carries the tax burden.

VAT/GST registration

Who is required to register for VAT/GST and other indirect taxes? 

Entrepreneurs carrying out a business, provided they are collecting revenues from the sale of goods or the rendering of services in Curaçao. Upon request, entrepreneurs may be exempt from turnover tax provided that the turnover in the preceding year is less than 30,000 Netherlands Antillean guilders (ANG). Not applicable for certain real estate activities.

Is voluntary registration for VAT/GST and other indirect taxes possible for an overseas company (e.g. if the annual turnover is below the relevant VAT/GST and other indirect taxes registration threshold)?

No, based on the applicable legislation, overseas companies may only register for sales tax purposes in cases where the company is subject to sales tax in Curaçao.

Are there any simplifications that could avoid the need for an overseas company to register for VAT?

No.

Does an overseas company need to appoint a fiscal representative?

No.

Which forms and supporting documentation does an overseas company need to submit for VAT/GST and other indirect tax registrations?

A formal request. It is only required to include general information in the respective form:

  • incorporation documents of the legal entity 
  • identification of directors and officers of the legal entity 
  • information concerning the address of the entity within Curaçao 
  • business activity.

Is grouping* for VAT/GST and other indirect taxes possible?

No.

VAT/GST compliance

How frequently are VAT/GST and other indirect tax returns submitted?

Monthly.

What are the exchange rate rules in your country?

Each year, the tax authorities publish an overview of the average exchange rate of 1 year regarding several foreign currencies. However, the taxpayer is also allowed to use the exchange rate of the payment/receipt date. The ANG is linked to the US dollar (USD 1=ANG 1.78).

International Supplies of Goods and Services

Exports – Goods

How are exports of goods treated?

Export of goods and services performed abroad are not subject to OB.

Exports – Services

How are exports of services treated for VAT/GST purposes?

Export of goods and services performed abroad are not subject to OB.

Imports – Goods

How are goods dealt with on importation?

When goods are imported into Curaçao, import OB and customs duties must be paid before the goods are released from customs’ control.

Exemptions apply such as supplies to inherent vessels or trade products.

Imports – Services

How are services brought in from abroad treated for VAT purposes?

Services rendered abroad which are enjoyed in Curaçao are taxable. If services are rendered to a local entrepreneur and if OB is, a reverse-charge mechanism will in principle apply, which means that the local entrepreneur becomes liable for OB in connection with the services rendered by the foreign entrepreneur.

VAT/GST recovery

Can an overseas company recover VAT/GST and other indirect taxes if it is not registered for VAT/GST locally?

No.

Are there any exemptions with the right to recover or deduct input VAT?

No.

Are there any restrictions to the deduction of input VAT?

In principle, there is no right to deduct sales tax. However, the current tax legislation provides two possibilities for reclaiming sales tax.

Upon request, sales tax on the import of trade goods can be deducted provided that no exemption applies to the supply of these goods.

Upon request, sales tax on the import of goods used for packaging or manufacturing of exported goods can be deducted.

Tax points

When is VAT/GST due on a supply of goods or services?

Ultimately by the 15th day of the next month.

Invoices

Is a business required to issue tax invoices?

Yes.

Is it possible/mandatory to issue invoices electronically?

Yes, it is possible but not mandatory.

Is it possible for the vendor to issue an invoice ( i.e. self-billing)?

No.

Record-Keeping Requirements

How long must records and invoices must be retained?

The books, accounting registry and invoices shall be stored for a period of 10 years.

Can the invoices be stored abroad?

Yes.

Audits

Do tax audits take place on a regular basis?

Yes, approximately every 5 years.

Are audits done electronically in your country (e-audit)? If so, what system is in use?

No.

What penalties can arise from non-compliance?

There are two different types of penalties. The first type is a default penalty and applies when:

  • the tax return is not filed on time (maximum penalty of ANG2,500) 
  • the tax due is wholly or partially not paid within the specified period (maximum penalty of ANG10,000). 

The second type is an offense penalty and applies when tax is not fully paid in time due to deliberate intent or gross negligence of the taxpayer. The maximum penalty is then 100 percent of the tax due.

Special Indirect tax rules

Are there any special rules for the sale of a company by one taxpayer to another where VAT is not due on the sale?

Yes, an exemption is applicable based on a general decree.

Are there unique specific indirect tax rules that you would not expect to find in ‘standard’ VAT jurisdictions?

In general, there is no right to claim deduction of sales tax paid by entrepreneurs.

Does a reverse-charge mechanism apply for goods or services?

Yes.

Are there indirect tax incentives available (e.g. reduced rates, tax holidays)?

Yes, the law contains a number of exemptions.

Rulings

Are rulings and decisions issued by the tax authorities publicly available?

No.

Footnote

*By ‘grouping’ we mean: either a consolidation mechanism between taxpayers belonging to the same group (payment and refund are compensated but taxpayers remain distinct) or a fiscal unity for VAT/GST purposes (several taxpayers are regarded as a single taxpayer).

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