Offshore and E-Zone on Curacao
Offshore and E-Zone on Curacao
Export regelingDe Curacao export basis beginning on January 1 and which is part of the Curaçao law on income tax, constitutes an important step in creating a competitive tax for companies located in Curacao or who want to start an export business on the island . The scheme may also apply to companies that currently want to use offshore tax of Curaçao.
The export regime is introduced to compensate companies for potential adverse competitive conditions that apply to Curaçao and to boost the export sector of Curaçao. The scheme is also advantageous for employment in the export sector and related industries.
tax Benefits
The export regime is a tax measure for companies and sectors in Curaçao whose activities primarily relate to the export of goods and / or services; that is to say that at least 90% of their gains must come from outside the activities of Curaçao. The export regime allows companies to let their earnings fall below the effective tax income of approximately 3.86%. This percentage is made up of a combination of the general rate of income tax of 25% applicable on 5% of the profits, while the remaining 95% of the income is taxed at 2.75%. In the future, the effective tax rate may be even lower still as a percentage of the overall gains even further down. Moreover, companies with a stock exchange license will not have to pay sales tax in Curacao. Most international operating companies fall into this category. Additional advantage is that the stimulus is not restricted to certain designated areas and that (provisional) permits not required in order to qualify for the scheme.
qualifying activities
As previously reported, includes one of the conditions to qualify for the export scheme like that one company profit exclusively or almost exclusively (minimum 90%) earned from activities outside Curaçao. The following activities a company can qualify for an export scheme:
Exports of goods
Maintenance and repair of goods from companies established outside Curacao
Maintenance and repair of machinery and other equipment located outside Curacao
E-commerce activities
Other services aimed at foreign countries, including storage activities in the field of financing and permits, the issuance of permits for the use of resources, management of shares in other companies or membership of a cooperative enterprise.
Quality
Except that there have to be met the criteria with regard to qualifying activities, some of the demands are also being made in terms of quality. Want to get a company eligible for the export scheme, should that company or enterprise to which the company belongs in Curacao have a substantial presence in Curaçao with regard to the nature and size of the activities on the island. By incorporating existing internationally accepted standards into national legislation, Curacao shows his willingness to meet international standards and its focus on quality of doing business. The latter is also important to ensure that the scheme in the future to maintain, considering the international developments and the focus on quality. The Minister of Finance will issue further guidance on how the quality should be put into practice.
potential candidates
The combination of the focus of export control on both exports of goods and services, as well as on quality, regulation is of particular interest to service centers, international transport, trading, so-called offshore banks, coordination and headquarters of multinationals or companies that already have a branch have in Curacao, but want to expand their activities to customers abroad. The export regime could also be interesting for companies that already have a branch in Curaçao and still fall within the offshore tax rates. The offshore tax have already been abolished in 2002, but the scheme will run through to 2019. While there are so going for another five years, have entered many business obligations for a long time, so it is extremely important to take well in advance keep up with the definitive abolition of the offshore tax rate in 2019. it would therefore in some cases can be interesting as soon as possible to submit an application to be eligible for the export scheme, even before the date of offshore tariffs are abolished.
Resume
In brief, the new export regime provides an interesting incentive for companies wishing to set up a company in Curacao and offers this continuity for certain businesses that currently use offshore tax rates on the island. These incentives, combined with Curacao’s geographic location, its powerful tax and legal infrastructure, multilingual and highly skilled workforce, and the fact that it is part of the Kingdom of the Netherlands, Curacao is an extremely attractive hub for business.
Source: www.e-zonecuracao.nl
