Atlas | TAX PLAN 2023 – PART II
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Last Friday, the Aruba Government sent a legislative proposal to Parliament (Tax Plan 2023 – Part II, Belastingplan 2023 – deel II). Below is a summary of the main changes that the new legislation will bring.

Levy of BBO/BAZV/BAVP on imports of goods

  • As from July 1, 2023, imports of goods will be a taxable event for BBO/BAZV/BAVP purposes. This applies to imports by both entrepreneurs and non-entrepreneurs (such as private individuals). This is intended to remove a tax incentive to import directly (i.e., instead of buying the goods from a local entrepreneur).
  • The BBO/BAZB/BAVP (with a total rate of 7%) will be calculated on the customs value of the goods imported. It will be levied in accordance with the rules for levying import duties. The Department of Import and Excise (Departement der Invoerrechten en Accijnzen) will be responsible for levying BBO/BAZV/BAVP on imported goods. This Department may exchange information obtained in that connection with the Department of Taxation (Departement der Belastingen).
  • Goods that are exempt from import duties will be exempt also from BBO/BAZV/BAVP.
  • The levy of BBO/BAZV/BAVP on imports of goods will be introduced without any transitional arrangements. This means that transferring goods from a customs warehouse into free circulation (vrije verkeer) after July 1, 2023 will also trigger BBO/BAZV/BAVP. The same applies to goods ordered before July 1, 2023, but imported after July 1, 2023.

Deduction of BBO/BAZV/BAVP levied on imports of trade goods

  • Entrepreneurs importing trade goods (handelsgoederen) may deduct the BBO/BAZV/BAVP paid on import from the BBO/BAZV/BAVP that they are liable to pay in the month of import. Trade goods are goods intended for resale, for example where a supermarket imports goods and then resells them. Furniture imported by a hotel or restaurant, on the other hand, is not intended to be resold and therefore is not a trade good (as a result of which the BBO/BAZV/BAVP paid on import must be regarded as an additional cost item). In practice, there will undoubtedly be discussions about what does and what does not qualify as a trade good. The Explanatory Memorandum indicates that the term should be given a ‘narrow’ interpretation: trade goods are only goods that are intended for resale without any processing or assembly into a new trade good by the importing company. The Minister may establish further rules by ministerial decree to establish the definition of trade goods.
  • This right of deduction is subject to the condition that the entrepreneur must draw up invoices in accordance with the legal requirements, or else use a cash registration system in accordance with legal requirements. However, for purposes of the deduction, it does not matter whether the trade goods have already been resold or are still in stock.
  • If the amount of BBO/BAZV/BAVP paid on imports of goods in a month is greater than the BBO/BAZV/BAVP that the entrepreneur is liable to pay, the entrepreneur may claim a refund for the difference. However, this does not apply to entrepreneurs that are eligible for the ‘small business’ scheme (kleine-ondernemersregeling).

Other changes

  • The investment deduction (10%) for income tax and profit tax was previously subject to the condition that the taxpayer must purchase the business assets from an entrepreneur established in Aruba. That condition will now be removed: the right to the investment deduction will extend to business assets purchased from foreign entrepreneurs also.
  • The concept of ’employment’ is crucial for levying wage tax. It refers to an employment relationship in which there is a relationship of authority. To prevent confusion and disagreement, the definition of employment in the Wage Tax Ordinance will now be expanded to include employment relationships of persons who perform work on behalf of an entity in which they directly or indirectly hold a substantial interest (i.e., 25% or more).
  • As of the beginning of this year, the Tax Plan 2023 – Part I introduced a ‘usual salary’ (gebruikelijk loon) for the purpose of levying wage tax. One of the possible factors for determining that usual salary is the salary of the highest-earning worker in the relevant entity or an associated entity. The new legislation will now add a provision clarifying that an associated entity is an associate for profit tax purposes.
  • The deduction of payments of interest and service fees to associated entities and individuals for profit tax purposes is restricted. Until 2022, the concept of associated entities and individual persons meant a minimum interest of 1/3. As from the beginning of this year, pursuant to the Tax Plan 2023 – Part I, this has been changed to an interest of 1/20th. However, that was a mistake: it was intended to be 1/4th, according to the Minister’s announcement in February in the National Gazette (Landscourant). The Tax Plan 2023 – Part II corrects this mistake.


The Explanatory Memorandum to the Tax Plan 2023 – Part II announces also that the import duty regime will be changed. In particular, it will involve fewer different tariff rates, namely 6 instead of the current 12. As a result, for example, the current rate of 2% for energy-efficient appliances and devices will go down to 0%, while import duties for jewelry will go up from 3% to 6%. Import duties on building materials will go down from 10% (which was previously 12%) to 6%, and import duties on cars will go from 30%, 40%, or 50% to 32%. However, import duties on food will remain unchanged. These changes to the import duty regime are part of a separate legislative proposal, which has not yet been sent to Parliament. We will of course update you as soon as that happens.