In June of 2018, The Parliament of Curaçao has approved new legislation that has made significant changes in the General Ordinance on National Taxation, the Profit Tax Ordinance 1940 and the National Ordinance.
These amendments will mostly affect preferential tax regime companies and also include some administrative requirements for tax matters. Most changes will go into effect 1 January 2019.
Getting in line with OECD recommendations
The Organization for Economic Cooperation and Development (OECD) has minimum standards and guidance for preferential tax regimes. They have looked at Curaçao and realized that the tax legislations in place were not fully aligned with their recommendations. Curaçao has made the necessary legislative changes which will allow for compliance with the OECD.
What are the changes?
The changes are affecting mainly special regime companies. These entities will likely have to go through some changes to be compliant.
Changes will affect the e-zone companies. Prior to these tax law changes, these entities could trade electronic services and goods. Going forward they can only trade goods. These companies must adapt. For example, an online gaming company would no longer be allowed to trade through an e-zone in this new regime it would have to convert into a different company.
Royalties companies will be heavily affected by the tax changes. In the past, a company could develop something in the US, sell it to a company in Curaçao and earn the royalties in Curaçao. Royalty companies will have to look for alternatives, unless the Intellectual Property has been developed in Curaçao.
The tax-exempt company regime, as it now exists now, will transform into a Curaçao Investment Company, while the current...