Scope and Rates
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.
The Miscellaneous Sales Tax Act introduced some important amendments to the OB rates. As of May 1, 2013 (unless stated otherwise) the OB rates are as follows:
- 6% standard rate;
- 0% on basic commodities, including rice, flour, potatoes, fresh vegetables and fruit, and on non-profit sales by social, cultural, charitable, sportive, and religious organizations;
- 7% on insurances; and effective January 1, 2014 on the provision of accommodations;
- 9% on luxury and unhealthy goods and services such as cars, pleasure crafts, alcohol, tobacco, meals consumed in hotels, coffee shops, restaurants or take-away meals, cellular phones and other communication devices, computer games, fireworks, Christmas trees, lotteries, movies, exhibitions, and theatres.
Certain goods and services are exempt from sales tax with no right to recover input tax, including:
- on request the OB in respect of the goods used for the manufacturing or packaging of goods for export
- the delivery of real property provided that real estate transfer tax is levied
- specific supplies of fuel
- supply of goods and services to oil refineries, used for their operations
- services rendered to companies established in an E-zone
- services rendered to and by companies with a foreign exchange license
- certain services to customers abroad are deemed to be rendered outside Curaçao (non taxable), for instance financial, IT, licensing services and services rendered by E-zone companies, provided that the service is factually enjoyed abroad.
- Real estate tax
- excise taxes
- stamp duty & registration dutyland tax (real estate) (with considerable certainty, by January 1, 2014 the term land tax will disappear and will be replaced by the term property tax, as a result hereof tax is levied on the value of all property and not only on the value of land)room tax & casino tax. (As the basis for the room tax and the sales tax is the same, the room tax will be embedded into the sales tax legislation as per January 1, 2014. A special transitional provision will apply to entrepreneurs to whom a room tax exemption was granted in the past)
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 was less than ANG 30,000 (not applicable for real estate leasing activities).
If taxpayers do not follow the registration procedures explained above, there is a penalty depending on the gravity of the case and with percentages ranging between 5 and 100 percent of the tax due with maximum amounts between ANG 2,500 and no limit respectively.
There is no special registry for OB but it is lawful practice to register a taxable foreign company in the Curaçao Taxpayers Registry. As mentioned above, such a registration involves the identification of the relevant taxable person with a valid identification number for all tax purposes (including invoicing, filing tax returns, and other reports to the tax administration).
There are no simplifications.
If an overseas company is registered in the taxpayer’s registry, there will in general not be an obligation to appoint a fiscal representative.
Turnover Tax grouping
Taxpayers are obligated to submit monthly tax returns relating to taxable and exempted operations.
No, there are not.
Generally not applicable but if the reverse charge mechanism is applicable then the daily exchange rate should be used.
Turnover Tax recovery
In general, no.
In general it is not possible to recover OB.
International Supplies of Goods and Services
Export of goods and services performed abroad are not subject to OB.
When goods are imported into Curaçao, import OB and customs duties must be paid before the goods are released from customs control.
Exemptions apply like supplies to inherent vessels or trade products.
Services rendered abroad which are enjoyed in Curaçao (enjoyment of services) are taxable.
If services are rendered to a local entrepreneur and if OB should be due in this scenario, 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.
Layout of invoices is strictly regulated. Among others, invoices must contain information about the identity of seller and buyer. In addition, invoices must disclose the price per unit and the OB charged separately from the sales price.
No, to be requested.
No, to be requested.
Transfers of Business
The transfers resulting from business reorganizations (merger or spin-off) or the sale of a (part of) a business are not subject to turnover tax. Transfers of individual assets however are taxable.
Options to Tax
Head Office and Branch transactions
There are no special rules for OB, since both are considered as different taxpayers for OB purposes.
There are no specific anti-avoidance rules in Curaçao legislation.
There are certain penalties for failing to fulfill formal obligations (late registration, mistaken declaration of OB, late submission of an OB return and other irregularities).
How often do tax audits take place?
Once every 5 years.
Are there audits done electronically in your country (e-audit)? If so, what system is in use?
Is it possible to apply for formal or informal advance rulings from the (indirect) tax authority?
Not in general.
Are rulings and decisions issued by the tax authorities publicly available in your country?
N/A for rulings.
In general there is no right for entrepreneurs to claim deduction of turnover tax paid. Curaçao sales tax is based on a cumulative system, which means that there is in principle no reclaim of sales tax (no VAT system).
- E-zone: exemption from sales tax on services rendered to companies established in the E-zone and services rendered by these companies to customers abroad.
- Exemption from sales tax for qualifying tourism projects.