Income tax in Netherlands Antilles

March 30, 2011

Netherlands Antilles waterfront houses

INDIVIDUAL TAXATION

Resident individuals are taxed on their worldwide income. Married couples are taxed jointly, except on income from employment, business, and certain periodical payments. Dependent children's income, excluding employment income, is taxed jointly with the household.

INCOME TAX

There are four categories of income: (1) income from real estate, (2) income from movable capital, (3) business and employment income, and (4) rights on periodical payments. For each category of income, taxable income is computed by deducting income-generating expenses. The resulting taxable income from all sources is then aggregated and taxed at progressive rates.


INCOME TAX 2009

TAXABLE INCOME, ANG (US$) TAX RATE
Up to 25,514 (US$14,261) 10%
24,514 - 38,271 (US$21,392) 16% on band over US$14,261
37,271 - 53,154 (US$29,712) 21% on band over US$21,392
53,154 - 79,730 (US$44,567) 27% on band over US$29,712
79,730 - 112,685 (US$62,988) 32% on band over US$44,567
Over 112,685 (US$62,988) 38% on all income over US$62,988
Source: Global Property Guide

Surtax

The tax liability is increased by an island surtax which is 30% for CuraƧao and 25% for all other islands.

The following tax credits are available to residents:

  • Standard credit of ANG1,328 (US$742), excluding the island surcharge
  • Single-earner credit of ANG887 (US$496), excluding the island surcharge
  • Special tax rebate or credit for children younger than 28 at 48 (US$27), AGN60 (US$34), AGN236 (US$132), AGN473 (US$264), depending on the age of the dependent child and whether the child is studying or not
  • Senior citizens' credit of ANG669 (US$374) for individuals who are 60 years or older, excluding island surcharge

Residents are allowed to deduct the following personal expenses from the taxable income:

  • Annuities and periodical payments and allowances ending upon death of the beneficiary or a third person, which the taxpayers is legally obliged to make
  • Pension premiums
  • Interest on personal loans up to ANG2,500 (US$1,397) for single taxpayers and ANG5,000 (US$2,795) for a married couple
  • Interest, charges and premiums relating to a mortgage loan for the acquisition and/or improvement of an owner-occupied dwelling up to ANG27,500 (US$15,372); no maximum limit is imposed if the loan was contracted before 1 August 2000
  • Maintenance expenses regarding the owner-occupied dwelling up to AGN3,000 (US$1,677) and premiums for a fire and natural disaster insurance; this deduction is not available to individuals whose house is rented out
  • Sickness insurance, old age insurance and general widow and orphans insurance premiums if these are not compensated by the employer
  • Contributions to pension and savings' funds for 5% of gross income, with a maximum deduction of AGN840 (US$470)
  • Life insurance, annuity and pension premiums up to 5% of taxable income with a maximum deduction of ANG1,000 (US$559)
  • Disability insurance up to ANG3,000 (US$1,677)
  • Donations to religious, charitable, cultural, scientific institutions and institutions for the general interest are deductible to a maximum amount of 3% of the taxable income, if the donations exceed 1% of taxable income and ANG100 (US$56)
  • Extraordinary expenses for sickness, delivery, death, maintenance of family members are deductible to the extent the aggregate expenses exceed 5% and ANG1,500 (US$838) of gross income
  • Education costs; if the taxpayer has to reside abroad for the purpose of attending a training course or to study for a profession, 75% of the accommodation expenses are also deductible

RENTAL INCOME
Income derived by individuals from the leasing of immovable property is taxed at normal progressive rates. As of 1 January 2001, the taxable income is 65% of the gross income. Maintenance expenses and other income-generating expenses are not deductible because these expenses are accounted for in the standard deduction of 35% of the gross income. Interest and expenses for the acquisition and improvement of the property are deductible.

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 from the sale of real property are not taxable in the Netherlands Antilles.


PROPERTY TAX


Ground Tax

Ground tax is levied on all real properties in Netherlands Antilles, payable by the owner. The tax base is the estimated fair market value of the property, which is computed as the average rental value multiplied by 12.5.

Bonaire and Curacao charge 0.3% ground tax. In addition to that, a 15% municipal surcharge is levied on the amount payable in Curacao. There are no property taxes in Saba, St. Eustatius, and Sint Maarten.

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