Curaçao: Offshore Legal and Tax Regimes
E-Commerce Taxation Regime
As of April 1, 2001, special tax legislation for international Internet companies on Curaçao came into force to act as an incentive to persuade e-commerce companies to relocate their activities to the island. The new law replaces the old Free Zone law and governs 'E-Zones', which are areas within Curaçao where international trade and supporting services may be carried out by electronic communication and electronic commerce.
Only companies with capital divided into shares may perform activities in the e-zones including trading or providing services to companies located outside the Netherlands Antilles.
A company may be allowed to conduct business with other firms located in an e-zone but the company has to apply to the local authority before doing so. If approved, the company must meet a certain set of conditions relating to price setting, quality of the goods and services on offer and the distribution of goods. The turnover generated through local business may not exceed 25% of the total turnover.
In terms of profit tax, the profit of companies within the e-zones will be taxed at 2% - including surtax - until January 1, 2026. This rate is not applicable on the profit of an e-zone company if it is generated by the sale of goods or services to companies located in Curaçao or generated through the rendering of services to affiliated companies located in the country. In addition there is no import duty or turnover tax charged on goods entering the e-zones.
Finally, employees who have lived in excess of five years outside Curaçao before starting work in an e-zone can qualify for expatriate status, with certain tax-free benefits - providing certain conditions are met. An e-zone company can calculate the wage tax on the net salary of the employee without being required to 'gross up' the salary.