Aruba: Taxes and Costs
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Rental income taxes can be very high
Effective Tax Rate on Rental Income |
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| Monthly Income | US$2,500 | ||
| Tax Rate | 4.4% | ||
| Click here to see a worked example | |||
Source:
Disclaimer
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INDIVIDUAL TAXATION
Non-residents are taxed on their income sourced from Aruba. Married couples may be taxed jointly or separately. However, spouses cannot opt for joint taxation on their incomes from employment, business, and freelance work.
INCOME TAX
There are two schedules of income tax. Schedule I applies to the following:
- A married taxpayer whose spouse do not have earned income
- A married taxpayer who has opted for joint taxation
- An employee who was married for at least 5 years but is now permanently separated or divorced
- An unmarried taxpayer who claims child allowance
Schedule II applies to all other taxpayers that do not satisfy the conditions for Schedule I. Income tax is levied at progressive rates and the tax bands are adjusted annually for inflation.
Income Tax |
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| TAXABLE INCOME, AWG (US$) | |
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| Schedule I | Schedule II | |
| Up to 6,524 (US$3,645) | 7.00% | 7.40% |
| 6,524 15,361 (US$8,582) | 9.55% | 10.05% |
| 15,361 25,257 (US$14,110) | 13.70% | 14.45% |
| 25,257 36,561 (US$20,425) | 18.00% | 19.00% |
| 36,561 49,123 (US$27,443) | 23.50% | 24.80% |
| 49,123 63,193 (US$35,303) | 29.00% | 30.60% |
| 63,193 76,095 (US$42,551) | 34.10% | 35.95% |
| 76,095 89,999 (US$50,279) | 38.00% | 40.10% |
| 89,999 -107,725 (US$60,182) | 41.75% | 44.05% |
| 107,725 133,316 (US$74,478) | 43.20% | 45.60% |
| 133,316 171,122 (US$95,599) | 46.25% | 48.80% |
| 171,122 229,566 (US$128,249) | 52.00% | 54.85% |
| 229,566 272,187 (US$152,060) | 54.20% | 57.20% |
| Over 272,187 (US$152,060) | 55.85% | 58.95% |
| Source: Global Property Guide | ||
RENTAL INCOME
Income derived by individuals from the leasing of immovable property is taxed at normal progressive rates. Taxable income is gross rental income less maintenance costs, land tax, insurance premiums, and interest on mortgage payments.
Income from immovable property includes not only rent and lease payments, but also income from second houses, which are not rented out.
CAPITAL GAINS
Capital gains realized from selling real estate property not connected in business activities is exempt from capital gains tax.
PROPERTY TAX
Real Estate Tax (Grondbelasting)
Real estate tax is an annual tax levied on real property in Aruba. The tax is levied at a flat rate of 0.4% of the propertys rental value if it exceeds AWG60,000 (US$33,520). The resulting value is multiplied by 12.5 if the property was built before 01 March 1977. If the property was built thereafter, the applicable multiplier is 8.333.
The owner is liable to pay the tax and an assessment is always made for a period of 5 years. The tax is payable in four equal installments, on or before the last day of each quarter.
Upon request, no tax is due for a quarter if a building for a subsequent period of 6 months is not used and not rented. Such request has to be made within 3 months after the end of the relevant calendar year.
Aruba - more data and information
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