Prikichi

Overview tax laws

• Corporate Income Tax

  Corporate income tax is due on the profit of an enterprise. The rate is set at 28%.

• Dividend Withholding Tax

  Upon the distribution of a dividend and depending on the kind (individual or entity) or location (Aruba or abroad) of the shareholder, dividend withholding tax may be due. Depending on the circumstances, the rate is set on 0%, 5%, 7.5% or 10%.

• Foreign Exchange Commission

  Foreign exchange commission is due on all transfer of funds (whether in cash or via electronic transfer) abroad.The rate is set on 1.3%.

• Gaming and Room Tax

  Gaming tax is due on the gross receipts generated with providing access to hazard games. The rate is set on 4%. Room tax is due upon occupancy of a hotel room or timeshare unit. The rate is set on 6%.

• Ground and Transfer Tax

  Ground tax is due if one owns the legal title of a real estate per January 1, 2008. The rate is set on 0.4%. Transfer tax us due if the legal title of a real estate is sold. The rate is set on 3% up to a value of AWG 250,000 and 6% exceeding AWG 250,000.

• Individual Income Tax

  Individual income tax is due on income from e.g. a (previous) employment, business, real estate, and interest. The rate is progressive with a maximum of 58.95%

• Social Security

  Aruba's social security systems covers old age pensions (AOV), widowers' pensions(AWW), general health (AZV), and sicknesss (ZV), as well as accident (OV) and dismissal (cessantia). The rate varies per insurance.

• Turnover Tax

  Turnover tax is due by all entrepreneurs that in the course of their enterprise supply goods or render services in Aruba. The rate is set on 3%.

• Wage Tax

  Wage tax is a pre-levy to the individual income tax and taxes the (previous) employment income. The rate is progressive with a maximum of 58.95%.

Special regimes

• Exempt Company

  If an Aruba exempt company conducts specified activities like financing, licensing, holding or investment activities, the income derived from such activities are tax exempt for Aruba corporate income tax purposes.

• Free Zone Company

  The free zone company is situated in a specifically designed area on Aruba and must focus itself on export of good and /or services. Financial services are not allowed. The tax rate is set on 2%for all profit generated with export. The combined corporate income tax and dividend withholding tax rate varies between 6.9% and 11.8%, depending on the location of the shareholder.

• Imputation Payment Company

  The imputation payment company is open to all enterprises conducting specified activities like hotel, financing, licensing or investment activities. The effective combined corporate income tax and dividend withholding tax rate varies between 6.9% and 11.8%, depending on the location of the shareholder.

• Transparency Regime

  Transparency implies that although for legal purposes a limited liability company exists, for tax purposes this entity is treated as a partnership and the income is therefore subject to taxes at the shareholder(s). If the shareholder(s) have no taxable presence on Aruba, effectively no levy will take place on Aruba.

Other

• Filing and Paying Dates

  The filing and paying dates are important to keep in mind when you intend to start or are already doing business on Aruba. Not Not complying with these dates may result in penalties being raised.

• Penalty System

  The Aruba penalty systems for non-compliance with the laws is very strict. Penalties may vary between a minimum of AWG 125 (omission) and a maximum of 100 % of the additional tax due (gross negligence or intent).

• VBA

  On January 1, 2009, a new corporate entity was introduced in the Aruba laws, the limited liability company (comparable to the LLC, hereinafter: VBA). The VBA is a very flexible corporate entity that can be shaped according to the wishes of the incorporator.