Curaçao: Personal Taxation
Residence and Liability for Taxation
For taxation purposes, an individual is either resident or non-resident, and nationality is not a factor in determining tax status. Residence for tax purposes is determined by taking into account the location of an individual's permanent home, their habitual place of actual residence, and their centre of economic and social interest. Residents are taxed on their world-wide income under the following headings:
- Income from a business or profession;
- Income from employment;
- Income from property (real estate);
- Income from capital;
- Certain periodic receipts.
Fringe benefits are mostly taxable, including housing allowances and reimbursement of taxes. Capital gains are not taxed unless the gain results from business activity, or unless it results from the sale of shares of a company of which the individual concerned, together with certain specified types of relative, owns or has owned 25% or more in the last 5 years.
Non-residents are taxed on certain specified types of income arising in the Netherlands Antilles, including the following:
- Income from a business or profession carried on within the islands personally or through a representative or agent (activity lasting less than three months may be exempted);
- Income from employment (if such lasts less than three months, there is the possibility of an exemption, but this is seldom granted);
- Income derived from a position as manager or director of a Netherlands Antilles comnany;
- Income derived from property (real estate) in the Netherlands Antilles, or from a mortgage on such property.Note however that there is no withholding tax in the Netherlands Antilles.
All individuals are entitled to various deductions, up to specified limits, including:
- business expenses, such as moving and travel expenses, entertainment expenses, and automobile expenses;
- medical expenses;
- life insurance and pension plan payments;
- charitable contributions;
- social security contributions; and
Tax credits on foreign income are not accepted unless they are covered by a specific tax treaty. Foreign taxes actually paid as such are however deductible.
There are some fairly minor allowances for children.