Aruba: Offshore Legal and Tax Regimes

Taxation of Foreign Employees of Offshore Operations

This section refers to the taxation of foreign employees of offshore operations, see Personal Taxation for the general principles of individual taxation in Aruba, which also apply to the resident employees of offshore entities.

Residence (and not nationality) is the criteria for determining when and how much personal income tax is to be levied. Although there is no difference in the rates of personal income tax payable by residents and non-residents alike, there is a substantial difference in the categories of income which are assessed to personal income tax with non-residents receiving considerably more favorable treatment. Thus although residents pay personal income tax on employment income received from an Aruba entity irrespective of whether the employment income relates to work done in Aruba or abroad, non-residents only pay personal income tax on that portion of the employment income which relates to work done in Aruba (unless by way of exception the employer is an Aruba public company).

Residents are assessed on all dividends received irrespective of their source whereas non-residents are only assessed to personal income tax on dividends received from Aruba onshore companies.