Taxation of international executives
Are there social security/social insurance taxes in your country? If so, what are the rates for employers and employees?
The social security premiums in Aruba are levied separately from the income and/or wage tax. Aruba knows 5 different social security taxes: old age pension (“AOV”) and widow & orphans pension insurance (“AWW”), general health insurance (“AZV”), sickness insurance (“ZV”), accident insurance (“OV”) and cessantia.
In principle Aruba residents are subject to the AOV/AWW and AZV social security premiums. Under circumstances there might be an exemption for the AOW and AWW premiums. In case of employment, the AOV, AWW and AZV premiums are paid by the employee and the employer. In case of employment Aruba residents are in principle also subject to ZV and OV premiums. Under specific circumstances non-residents are also subject to ZV and OV premiums.
Are there any gift, wealth, estate, and/or inheritance taxes in your country?
Under the Inheritance Tax Ordinance an inheritance tax (rates vary between 2% and 24%) is levied on the increase in net wealth obtained as heir or legatee from a resident of Aruba, a gift tax (rates vary between 2% and 24%) is levied on the increase in net wealth obtained as a gift from a resident of Aruba and an estate tax at the rate of 8% is levied as an heir, a legatee or as a gift from a non-resident of Aruba.
Are there real estate taxes in your country?
Basically, Aruba property transfer tax (rates: 3% if the value is Afl. 250,000 or less and 6% if the value is Afl. 250,001 or more) is due on deeds and verdicts for the transfer of real property which is located in Aruba as well as the rights to which the real property is subject. The taxable basis is the value of the real property. The transfer tax is in principle due by the purchaser of the real property.
Are there sales and/or value-added taxes in your country?
Turnover tax (in Dutch: “Belasting op Bedrijfsomzetten”, hereinafter “BBO”) is an indirect tax that is levied on the operating revenues realized by entrepreneurs within the framework of their business or profession by the supply of goods and rendering of services in Aruba. BBO (current tax rate: 1.5%) is based on a cumulative system (i.e. in general no reclaim of turnover tax as in VAT systems). Under circumstances an exemption may be available.
As of December 1st, 2014, the State Ordinance Health Levy entered into force. Based on this Ordinance, 2% AZV Health Levy will be levied on business turnover realized by entrepreneurs within the framework of their business or profession with the supply of goods and services in Aruba. The AZV Health Levy has the characteristics of the current BBO and will also be levied on the entrepreneur who realizes the business turnover.
Are there unemployment taxes in your country?
Are there additional taxes in your country that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.
In general Aruba wage tax with progressive tax rates up to 58.95% (same rates apply as for personal income tax) is levied on the employment income of an individual and is a pre-levy to the individual income tax.
Customs duties are charged on importation of goods produced outside Aruba. Customs duties are charged as a percentage of the total value of the goods (that is the sterling equivalent of the price paid abroad increased by the transportations costs and insurance costs). To work out the percentage, each type of product is given a 'commodity code'. This tells you what the customs duty rate percentage is for that particular product. There are around 14,000 different classifications.
Excise taxes are levied on alcoholic beverages, cigarettes and fuel products.
Stamp duties and registration taxes are primarily levied per each government regulated size page which is to be used for official documents, inter alia, deeds executed before a civil-law notary in Aruba, deeds of bailiffs, official permits, documents regarding civil status such as passports and documents which are registered with government registry offices.
Foreign exchange commission of the Central Bank of Aruba
Although the foreign exchange commission as withheld by the Central Bank of Aruba can be regarded as a foreign exchange control instrument of the Central Bank rather than as taxes, we thought it is appropriate making you aware of these commissions. Basically a foreign exchange commission of 1.3% is withheld on payments made by residents of Aruba to non-residents (or from a bank account in Aruba florin to a bank account with a different currency).