Aruba is part of the Kingdom of the Netherlands. The Kingdom has a Tax Regulations for the Kingdom (Belastingregeling voor het Koninkrijk or BKR). The main purpose of the BKR is to avoid double taxation within the Kingdom. Additionally Aruba is party to the treaty between the Kingdom of the Netherlands and the United States of America concerning the exchange of information with regard to taxation.
Furthermore Aruba has her own tax legislation since it obtained the status aparte in 1986. The system consists of taxes on corporations and taxes on individuals, payroll (loonbelasting) and income (inkomstenbelasting) tax being the most noteworthy of the latter. The important Aruba taxes on corporations are profits tax (winstbelasting) and company turnover tax (belasting op bedrijfsomzetten or BBO). The BBO rate is 1, 5%. The Aruba tax is levied on the turnover that the company realized with the providing of goods and services in Aruba. Also Aruban tax law offers a system that eliminates double taxation of cash payouts from a corporation to its shareholders (dividendbelasting and imputatiebelasting).
From guests of hotels and lodgments a 9,5% room tax (logeerbelasting) is levied. The room tax is not levied on residents of Aruba only on not-residents. Gasoline, cigarettes, beer, wine, alcoholic spirits and mineral oil are subject to an excise duty. A transfer tax (overdrachtsbelasting) of 3% is levied on the transfer of real estate with the value of Afl. 250.000 or less, and 6% on the transfer of real estate with the value of more than Afl. 250.000. Furthermore there is a Real Estate Property tax (grondbelasting). This annual tax is levied on the value of the real estate. The tax rate amounts to 0,4% of the value of both unimproved property and improved land with structure, and is charged to the owner of the properties. A person who inherits money or property on the estate of a person who has died has to pay inheritance tax (successiebelasting).
Aruba has a mandatory general insurance (AZV) for which premiums are levied. Other social security premiums are AOV, for old-age pension, and AWW, for widows and orphans. There is a contribution for both employers and employees.
A free zone is an area designated for international trade and services. Aruba has two e-zones available: one at Oranjestad and one at Barcadera. The profit of the free zone companies will be taxed at 2%. If trade is also conducted with companies located in Aruba, the company will have to request approval from the Management of the Free Zone Aruba NV. Providing services to companies located in Aruba is only allowed with permission of the Minister of Economic Affairs. The turnover generated through local business will be taxed against the normal tax rate of 35%.
VANEPS is not a tax advisory firm. The information contained on this page provided general guidance for companies only. It should not be used as a substitute for consultation a tax lawyer.