This tax guide provides an overview of the indirect tax system and rules to be aware of for doing business in Dutch Caribbean (Aruba).

Aruba - 120x120.pngIndirect tax snapshot

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What is the principal indirect tax?

Aruba does not have a value-added tax (VAT) or sales tax but does have a business turnover tax. Turnover tax is levied from entrepreneurs at the rate of 6% on the supply of goods or provision of services rendered in Aruba. Turnover tax is not levied at import at the moment. A turnover tax exemption is applicable on exports.

Taxable event
In the case of goods, the place of the taxable event is either where the transportation starts (if sold abroad) or at the physical location of the goods at the moment it is delivered. The place of the taxable event with regard to services is generally the place where the entrepreneur is established or from where one has a PE from which the service is rendered.

As an exception to the aforementioned general rule, the place of the taxable event for certain services (e.g. services related to a real property) is the place where the actual services are rendered (e.g. the place where the real property is situated).

Exemptions
Some exemptions from turnover tax on goods exist and are amongst others:

  • The sale of immovable property if it is subject to transfer tax.
  • Water, electricity and gas.
  • Free zone companies in as far as turnover is generated with sales abroad.

Some exemptions from turnover tax on services exist and are amongst others on revenue generated from:

  • Hotel rooms or leasing of apartments, if taxed with tourism levy.
  • Casino revenues. 
  • International transport of goods and services by way of airplane or ship. 
  • Life and pension insurances.
  • Interest, dividends, and capital gains of shares and securities.
Is there a registration limit for the tax?

No, however upon request, there is a small business regulation applicable in Aruba for sole proprietorships. The threshold/maximum turnover of the small business is Afl. 12,000 a year. Sole proprietorships with a revenue below this amount are not subject to the turnover tax. As of 2021 a fiscal incentive plan is in place which has increased the turnover threshold to Afl. 84,000 a year.

Does the same registration limit apply to non-established businesses?

Not applicable. Non-established businesses should only register for turnover tax purposes in case the business is subject to those taxes in Aruba.

Is there any specific legislation to tax non-resident supplies of electronically supplied/digital services to private consumers resident in your country?

Not applicable.

Does a non-established business need to appoint a fiscal representative in order to register?

No.

How often do returns have to be submitted?

A turnover tax return must be submitted on a monthly basis. The turnover tax is due on a monthly basis within 15 days of the calendar month following the calendar month in which the turnover tax is due.

Are penalties imposed for the late submission of returns/ payment of tax?

A default surcharge penalty may be imposed by the tax authority if the turnover tax returns are not submitted on time, or the related tax is not (fully) paid by the due date. The penalty varies between a minimum of Afl. 250 and a maximum of Afl. 10.000.

A penalty can also be imposed by the tax authorities due to the gross negligence of the taxpayer. The maximum amount of the penalty imposed can be 100% of the tax due.

Are any other declarations required?

No other declarations or returns are required in relation to the turnover tax in Aruba.

Are penalties imposed in other circumstances?

A penalty can also be imposed by the tax authorities due to the gross negligence of the taxpayer.

Can the VAT incurred by overseas businesses be claimed if they are not registered in Dutch Caribbean?

Not applicable. The turnover tax is not a VAT system.

 

What information must a VAT invoice show?

A turnover tax invoice must show:

  • An invoice number that is unique and sequential.
  • The entrepreneur’s name, address, and personal identification number for tax purposes.
  • The invoice date.
  • Mention the date on which the goods are delivered or the service is performed.
  • The customer's name and address.
  • A description of the goods sold and delivered and/or the services rendered, including quantities involved.
  • The remuneration owed.

As of 1 January 2019, the turnover tax amount may no longer be mentioned on the invoice, but must be included in the price.

Are there any current or anticipated Standard Audit File for Tax (SAF-T) or similar electronic/digital filing requirements eg invoice listing data file/real-time VAT reporting?

There are no current or anticipated Standard Audit File for Tax (SAF-T) or similar electronic/digital filing requirements. The turnover tax returns are filed digitally on the online portal of the Aruba tax authorities.

Contact us

For further information on indirect tax in Aruba please contact:

Hans_Ruiter_60x60px.jpg

Hans Ruiter
T +297 522 1630
E hans.ruiter@aw.gt.com

 

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