Special Zone San Nicolas

With retroactive effect to January 1, 2013, a special zone has been created in San Nicolas, a town located in the south-east of Aruba and home of the former refinery. This special zone intends to stimulate the area of San Nicolas with certain tax incentives. We note that the special zone in San Nicolas is based on Policy from the Minister of Finance, Utilities and Energy and needs to be incorporated into the law still. The law may deviate from the below-mentioned.

Transparency Regime

Aruba exempt companies (AVV), corporations (NV), and the limited liability company (VBA), can opt to become transparent, i.e. for corporate income tax, individual income tax and dividend withholding tax purposes the AVV, NV, or VBA is treated as a partnership. In case the AVV, NV, and VBA has foreign shareholders, the shareholders will only be subject to Aruba taxes if the shareholders have a taxable presence on Aruba via either a permanent establishment or a permanent representative.

Imputation Payment Company

An imputation payment company (hereinafter: IPC) is a corporation (NV) or limited liability company (VBA) which focuses on specific, designated, activities. A transitional regulation is applicable for all IPC’s existing per June 28, 2013, which was the date of the regime change. The IPC is subject to a flat rate of 10% and an exemption from dividend withholding tax.

Free Zone Company

The free zone is a special designated area on Aruba for activities abroad (export). It is however possible for services to be situated outside the designated areas by special decree, but no exemption from import duties can then be obtained.

Exempt Company

The exempt company is company that if the activities are restricted to certain pre-defined areas, the profits generated with these activities are tax exempt on Aruba. An Aruba exempt company (AVV), a corporation (NV) or a limited liability company (VBA), are all eligible for this regime. The exempt company remains subject to corporate income tax, i.e. a corporate income tax return needs to be filed if issued, but its profits are exempt.