State Secretary for Finance Van Rij wants to change the tax system of the Caribbean Netherlands by 30 points as of 1 January 2024. Whether that will happen depends on the Finance Committee of the Second Chamber on whether or not the BES Islands 2024 Tax Plan Bill will be declared controversial on Wednesday.

With this in mind, Van Rij stressed in a letter to the House today that it is “good to implement the adjustments and improvements now”. The current system dates from 1 January 2011. It has since been amended in a number of ways to address bottlenecks that emerged in its implementation. “The tax system on the BES islands is still broadly the same as in 2011 and contains a number of provisions and elements that need to be improved,” said the State Secretary.

See below which points are proposed for an adaptation.

Topics in the Caribbean Netherlands Tax Plan 2024

 

General provisions

1. A tightening of the concept of ‘passenger car’. This ensures a better levy of wage and income tax (about the company car) and the general spending tax (about the import of cars).

2. Various typos and incorrect changes in the BES Tax Act, the BES Income Tax Act, the BES Wage Tax Act, the BES Customs and Excise Act and various lower laws and regulations will be corrected.

 

Property and revenue tax (including location decision)

1. A tightening of the activity test for issuing the location decision and a relaxation of its retroactive effect.

2. A further relaxation of the holding test in order to obtain a location decision for holding companies (the 95% test for operating companies is reduced to 50%).

3. An adjustment of the property tax rate for hotels (from 10% to

12,5%).

1. There will be a property tax reporting obligation for property owners.

2. An adjustment of the rate of income tax; This will be increased from 5% to 10%, mainly to finance the increase in the tax-free sum in wage and income tax that has already been increased as of 1/1/2023.

 

General spending tax (ABB)

1. In the ABB, the integration levy is abolished; a complex provision taken from VAT legislation for the construction of immovable property on private land.

2. There will be fiscal unity in the ABB, mainly to prevent cumulation (ABB over ABB) between affiliated companies that cooperate a lot with each other.

3. There will be several minor changes to the billing system.

4. The small business scheme is increased so that more small businesses do not ABB must pay.

 

Formal legal rules

1. The legal framework for making electronic declarations will be extended, without requiring everyone to submit electronic declarations by 2024.

2. There will also be an extended notification obligation for making supplementary declarations; In those cases where the taxpayer knows that previous returns have not been submitted properly, but of which the tax authorities do not yet know this.

3. There will be an extension of the time limit within which an assessment may be imposed if a return is submitted without the taxpayer having been invited to do so and an extension of the time limit for tax debts, which can only be fixed at the end of a period.

4. The rules for the automatic reduction of assessments are broadened. As a result, taxpayers are more entitled to a tax refund.

5. A system is introduced allowing the inspector to impose an offense fine in the final assessment scheme. This was missing on the BES islands now.

6. The rules for chain and hirer liability will be adjusted; The possibilities to limit liability are broadened.

7. The information obligations for accounting agents are extended in several respects.

8. The legal framework for the exchange of tax information between the countries of the Kingdom is brought into line with the new tax arrangements between the countries of the Kingdom.

9. The legal regime for the exchange of information based on the Savings Directive will be abolished. After all, the European savings directive has not applied for several years.

10. The rules on which the tax authorities may derogate from the obligation of confidentiality are adapted to several new regulations.

11. In a number of lower regulations, rules are adjusted that still refer to the (already defunct) Board of Appeal for Tax Matters).

12. The Tax Regime for the Country of the Netherlands is adapted to a recent amendment to the Corporation Tax Act 1969.

 

Income tax

1. The dividend exemption in income tax will lapse.

2. The rate of the significant interest tax shall be (in parallel with the revenue tax) increased from 5% to 10%.

3. The rules on the tax-free allowance will be adapted, in particular in order to be able to provide more tailor-made solutions for the determination of the new tax-free allowance at the end of a calendar year.

4. The implementing rules for ex-patriates repeal all transitional provisions referring to orders once issued under Dutch Antillean law.

 

Payroll tax

1. A reversal scheme for claims is introduced, so that it becomes clearer under which circumstances claims for wages do not (yet) fall under the concept of wages.

2. The usual remuneration scheme for directors of major shareholders is extended and increased.

 

Customs and Excise Act BES (DABES)

1. One of the retention periods in the DABES will be adjusted to better match other retention periods.

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