A new year often brings changes to tax regulations, as many taxes are levied on a calendar-year basis. It is therefore common for desired adjustments to take effect at the start of a new calendar year. The year 2025 is no exception for Curaçao. As of January 1, 2025, several tax law changes have come into effect in Curaçao. Additionally, there are important fiscal developments taking place this year.
Expatriate Scheme Amended with Mandatory Local Training Requirement
The so-called expatriate scheme exists to attract highly skilled foreign employees by reducing the labor costs associated with hiring them. Especially as such employees are not readily available on the island. Under this scheme, employers are required to withhold less wage tax and social security contributions than under normal circumstances. There are also incentives including tax-free allowances.
However, as of February 1, 2025, an additional requirement is introduced. Employers must train a local employee to take over the expatriate's role after a maximum of five years. Moreover, the expatriate scheme can no longer be extended for a second five-year term, which was previously possible.
Corporate Income Tax Filing Deadline for 2023 Extended to January 31, 2025
Due to technical issues with the Curaçao Tax Office’s digital portal, the deadline for submitting the final corporate income tax return for 2023 has been extended to January 31, 2025. The tax authorities announced this extension at the last moment on December 31, 2024.
Adjustment of Wage Tax Tables and Social Security Contributions
On December 10, 2024, a Ministerial Decree was published regarding the wage tax tables for 2025. This means that the tax rules for wage tax have been adjusted in line with the 2025 income tax brackets. No significant financial impact is expected from this adjustment. The new regulation takes effect on January 1, 2025.
The amount for the old-age pension remains unchanged from last year and continues to be significantly lower compared to the other countries within the Kingdom of the Netherlands.
Implementation of Minimum Taxation
The Minister of Finance has announced the introduction of a minimum tax rate of 15% for multinational corporations operating in Curaçao. This means that large international companies must always pay at least 15% in corporate income tax.
Currently, some multinational companies pay less tax in Curaçao due to special tax regimes. This measure follows agreements made in 2021 by 138 countries—including Curaçao—under the OECD’s global tax framework. Known as "Pillar 2" or the "Global Minimum Tax," this regulation aims to combat tax avoidance. On December 20, 2024, the Parliament of Curaçao approved the implementation of these rules, aligning the country with global efforts to ensure fair taxation and reduce unfair competition between jurisdictions.
Relaxation of Annual and Quarterly Turnover Tax Filing Requirements
A new regulation effective January 1, 2025, aims to streamline turnover tax filing and reduce administrative burdens for both the tax authorities and businesses.
Small businesses with an annual taxable turnover of up to 30,000 guilders may request to file their turnover tax returns annually instead of monthly.
Businesses with a turnover between 30,000 guilders and 75,000 guilders may request to file quarterly.
Businesses with an annual turnover exceeding 75,000 guilders must continue filing monthly.
Additionally, the tax authorities now have the discretion to determine the filing frequency for greater efficiency, meaning they can assign businesses to annual or quarterly filing without requiring a request from the taxpayer.
Parliament Approves Mandatory Basic Pension Law
On December 19, 2024, the Curaçao Parliament approved a new law mandating a basic pension for employees. Under this law, all employees with a labor contract will automatically contribute to an authorized pension provider. Employees can contribute pension premiums up to a specified limit, which will be tax-deductible from their taxable income.
This pension system is intended to help individuals save for their retirement. The law does not apply to employees who already contribute to alternative pension plans. The goal is to improve financial security after retirement. However, this law has not yet come into effect.
Gaming Law Published in the Official Gazette
On December 23, 2024, a new law regulating gaming activities in Curaçao was published. This law modernizes regulations surrounding gambling operations and their oversight, with the implementation occurring in phases.
The first phase primarily introduces changes for online gaming operators. Additionally, an independent regulatory body will be established to ensure compliance with the law. This body will have specific responsibilities and powers to regulate the gaming sector more effectively, ensuring that gambling activities are conducted fairly and securely.
Tax Incentives for Land Development Extended
On December 17, 2024, the Director of Fiscal Affairs announced an extension of the temporary tax incentives for land development projects. This policy, now valid until December 31, 2025, applies to applications submitted between January 1, 2025, and December 31, 2025, for land development projects—excluding hotels.
To qualify for these incentives, at least 50% of the developed real estate must be sold to or primarily made available to foreign investors. This measure is aimed at stimulating investment in land development, particularly to attract foreign buyers.
Conclusion
The year 2025 brings various significant tax changes and fiscal developments. It is crucial for both businesses and individuals to stay informed about these updates to ensure compliance and maximize the benefits of the new regulations.
Do you have questions or need more information on how these changes may impact your situation? Our team is ready to assist you. Feel free to contact our tax advisors at 433-300 or info@cw.gt.com
