On 30 December 2014, Curacao's parliament adopted the Ordinance Tax Revisions 2015-2016. The main corporate tax related changes are summarized as follows.
The investment allowance of 8% of the acquisition cost assets (12% for buildings) is changed to 10%. Originally available in the year of investment and the following year, the allowance is now only available in the year of investment. The rules for investments made prior to 1 January 2015 continue to apply.
Certain deduction limits are changed, including:
Tax exempt status previously only available for private limited companies (BV) subject to certain conditions, is extended for public limited companies (NV).
The limit on the deduction on interest expense for loans from a tax exempt company in the same group is extended to interest on loans from non-residents of the same group if the non-resident is not subject to any profit tax. The same 3:1 debt to equity ratio applies.
The profit tax rate is reduced to 25%. The change applies for tax periods beginning on or after 1 January 2015. The rate will be further reduced to 22% from 1 January 2016.
From 1 January 2016, accelerated depreciation will be discontinued. In addition, buildings will only be able to be depreciated to 50% of their value. There will be no claw-back for buildings already depreciated below 50%.
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