Netherlands Antilles Tax & Resources - Deloitte

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Basic facts
Population 184,700 Inflation 3.2% (2005)*
Main languages Dutch (official), Papiamento and English GDP per head US$15,881 (2004)
Currency Netherlands Antillean guilder (ANG) GDP growth 0.5% (2005)*
GDP sources 1% agriculture, 15% industry, 84% services
*Economist Intelligence Unit.
Political environment

The Netherlands Antilles consists of five islands and is an autonomous country within the Kingdom of the Netherlands, with full autonomy in internal affairs. It is a parliamentary democracy. The Queen of the Netherlands is the head of state. A federal or central government attends to state matters, comprising a governor-general, appointed by the queen for six years; an appointed Council of Ministers; and an elected parliament (De Staten), which serves a term of four years.

In elections held in January 2006, the Partido Antia Restruktura (PAR) won 16 of 22 seats in parliament.
Foreign trade and investment
Exports US$773.1m (2005)* Imports US$2.1m (2005)*
*Economist Intelligence Unit.

Major trading partners: The US, the EU (in particular, the Netherlands), Aruba, Venezuela and the Bahamas.

Major exports: Petroleum products.

Free-trade zones (e-zones) are located at the harbour at Curacao, the international airport and the Industrial Park. They serve as a distribution and e-commerce centre for export to the Caribbean, the Americas and the EU.
Business and financing
Business forms Limited liability company, offshore company, stichting (Foundation)

The limited liability company (NVÛNaamloze Vennootschap) is the form historically used by nearly all limited companies in the Netherlands Antilles, whether for domestic trading or for offshore purposes. Other forms of business organisation are the Netherlands Antilles Besloten Vennootschap (NABV), exempt NABVs, the general partnership and the limited partnership.
Labour environment
Unemployment rate 14% Minimum wage Varies by sector

Employees contribute 1.5% of taxable pay for social security, up to a maximum of ANG 7,223.54 annually; employers contribute 0.5% of taxable pay up to a maximum of ANG 1,500 annually. Pensions are financed through employee contributions of 5% of gross wages up to a maximum of ANG 46,613 and the employer pays 6% up to the same maximum.

Individuals working in the Netherlands Antilles require residence and work permits.
Taxation
Corporate tax
Main rate 30%

Resident corporations are subject to taxation on their worldwide income. Non-resident corporations are subject to tax on income from a permanent establishment in the Netherlands Antilles, income from real property situated in the Netherlands Antilles or where they have loans secured by property situated in the Netherlands Antilles. Resident onshore corporations are subject to tax on profits at a rate of 30%. Companies established to do business offshore, exclusively for the benefit of non-residents, are known as offshore corporations and may be subject to lower rates of tax.

The Island surcharge is levied at a rate of 15% of tax payable, resulting in an effective rate of 34.5%. Dividends and capital gains relating to qualifying participations (ie a 5% shareholding) are either 95%-exempt or fully exempt from tax. Profits of a partnership are attributed to the partners, except in the case of a partnership limited by shares, which is treated as a separate entity for tax purposes.
Individual tax
Progressive rates to 39%

Resident individuals are taxed on their worldwide income; non-residents are taxed only on income sourced in the Netherlands Antilles. The tax rates rise progressively to 39%, excluding the Island surcharge. The Island surcharge for individual taxpayers is 25% of tax payable on Bonaire and 30% on the other islands.

Certain categories of income are subject to tax at special rates. Regular benefits from a substantial interest and gains on the disposal of a substantial interest are taxed at 32.5% (including the surcharge) but this percentage is expected to be reduced to 19.5% (including the surcharge) in 2006 or 2007.
Capital gains
Generally taxed as income

Capital gains are included in profits and taxed at the normal rates for income. Under the participation exemption, gains on the disposal of a qualifying participation are either 95%-exempt or fully exempt.
Indirect tax
Turnover tax rate 5% and 3%

A 5% turnover tax applies in the Leeward Islands (Bonaire and Curacao) and 3% tax applies in the islands St Maarten, St Eustatius and Saba. Exemptions include the supply of real property, medical services, supplies of fuel to gas and electric companies for generating energy, the supply of goods and services to oil refineries, the supply of fuel for ships and aircraft for public transport, and services rendered to and by offshore corporations.
Tax administration and compliance
Tax year Companies: accounting year; Individuals: calendar year

Onshore corporations must file an annual self-assessment tax return by a date set by the tax authorities. An extension may be granted until December 31st after the end of the accounting year, subject to certain conditions. There is a provision for advance tax payments. Final tax is payable when submitting the tax return. Offshore corporations must file a tax return within six months after the end of the calendar year.

Individuals must submit a tax return by a date set by the authorities, which will be at least two months after receipt of the return form. Provisional income tax assessments may require an advance payment of tax.
Additional tax information
Withholding taxes Interest and Royalties 0%.
Tax treaties A tax treaty has been concluded with Norway. The Tax Regulation for the Kingdom of the Netherlands regulates double taxation between the Netherlands Antilles, Aruba and the Netherlands.
Dividends Taxable, but a participation exemption applies.
Revenue protection There are no specific international anti-avoidance rules, but an abuse-of-law doctrine may be applied.
Groups A resident company and its subsidiaries may form a fiscal unity.
Incentives Manufacturing, processing and assembly; hotels and property development; industrial activities in economic zones; offshore corporations.
Other taxes Customs and excise duties, Inheritance and gift tax, Licence fees, Property transfer tax, Real property tax, Registration tax, Shipping registration fees, Special sales tax, Stamp duty, Usage tax.