The Dutch government wants to adjust the tax system of Bonaire, St. Eustatius, and Saba for it to become more straightfor­ward and more in line with the Dutch tax system. The cabinet also wishes to distrib­ute the burden more evenly. This proposal was sent to the House of Representatives on Budget Day (“Prinsjesdag”) on Tuesday, September 17. The House of Representa­tives and the Senate still need to approve the plans. Once the proposal has been ap­proved by the House of Rep­resentatives and the Senate, the measures will take effect on January 1, 2025, it was an­nounced in a press release. The Law Proposal on the Tax Plan 2025 contains im­portant measures for citizens and businesses on Bonaire, St. Eustatius and Saba.

For citizens, it is now es­tablished in law that people earning the minimum wage no longer need to pay in­come tax. To achieve this, the tax-free allowance is linked to the statutory minimum wage in the Caribbean Neth­erlands.

The cabinet also proposes to lower the entry amount of the second tax bracket from US $322,769 to US $50,000 with effect from January 1, 2025. This will put residents earning at least US $70,728 in the second bracket in 2025. They then pay a higher tax rate on the taxable in­come exceeding US $70,728. With this proposal, the cabi­net wants to distribute in­come tax more fairly by tax­ing higher incomes more. For entrepreneurs, the cabi­net proposes to increase the tax rate on property used by hotels from 10% to 11% with effect from January 1, 2025. This increase is prompted by the fact that the hotel sector has recovered in recent years and the lower rate, in force since 2013, is no longer nec­essary.

It is also proposed to in­crease the yield tax and sub­stantial interest rate from 5% to 7.5%. This means en­trepreneurs with a private limited liability company BV will be paying more tax on the profits. With this increase, the cabinet wants to bring the tax rate closer to the Dutch and international level.

Another important measure is that with effect from 2026, the threshold for the Small Business Scheme KOR is ad­justed annually in line with the inflation rate, so that small business entrepreneurs can continue to benefit from this scheme.

In addition, the Cabinet pro­poses to introduce an identi­fication requirement for em­ployees effective from Janu­ary 1, 2025. Entrepreneurs will then be required to ask for a copy of the identity doc­ument of the employee and keep the copy in the payroll administration. With this, the Cabinet aims to prevent em­ployees from working while undeclared and employers and employees from avoiding paying taxes as a result.

These initiatives are part of the Tax Plan 2025 and are addressed in the Law Pro­posal on the Tax Plan BES Islands 2025. Approval from the House of Representa­tives and the Senate is still required before these mea­sures can be introduced. The relevant vote is expected to take place in November and December 2024.

The Daily Herald.