Posted on 11 June 2018
The last years the international fiscal terrain changed immensely. With the help of the G20 leaders the international community acted together to elevate transparency and information change on the fiscal terrain and to attend to the faults in the international fiscal system that create chances of erosion of the fiscal base and the movement of profits, the so- called ‘Base Erosion Profit Shifting.’
The norms of the international agreements with regard to transparency and change of information on the fiscal terrain terminate the era of bank secrecy.
Over 150 countries and jurisdiction participating at the Global Forum on Transparency and the Exchange of Information for Tax Purposes guaranteed from their establishment in 2009 until present consistent and effective implementation of the norms of international transparency.
The financial crisis and the aggressive fiscal planning of multinational companies placed BEPS high on the political agenda.
September 2013 the G20 leaders approved the ambitious and extensive BEPS plan of action. On the basis of the plan of action, the OECD (Organisation for Economic Cooperation and Development) and the G20 countries developed a package of measures within two years. This package to which the countries must commit themselves consists of 15 actions. The principal goal of the actions is to bring fiscal transparency. Additionally, every country will be able to levy tax on the part that concerns them. From the point of view of the nineties, Curacao chose to be a transparent jurisdiction. In 2016 Curacao followed this course and committed itself to the minimum, which are 4 of the 15 points of action: points of action of BEPS 5,6 in combination with 15,13 and 14. The exchange of the reports of the countries (‘landenrapportage’) is action number 13 of BEPS.
The purpose of the countries’ reports is the exchange of information by the multinational companies with a total sale’s worth of 1.5 billion florins per year worldwide. They must report their information to Curacao and Curacao in turn will exchange the information with all countries in which the companies are established.
A government decree is linked to the bill, which gives the information to be submitted to the Tax Inspectorate for international exchange. Recently, the ‘Raad van Advies’ treated the government decree.
The introduction of this law is very urgent. If we as a country did not include action number 13 of BEPS in our law, Curacao will not comply with international commitments. In the framework of transparency and to enforce the control thereof, the law also regulates the obligation of the so-called ‘Stichting particulierfonds (SPF) to make a declaration of tax on profit (‘aangifte van winstbelasting’). However, on the basis of art. 2, clause 1 under h of the ‘Landsverordening op de winstbelasting 1940’ an SPF is exonerated from tax on profit, as long as the profit does not ensue from a business.
OECD evaluated Curacao in conformity with BEPS 5. It concluded that Curacao has 3 preferential regimes, which are the ‘vrijgestelde vennootschap’, the ‘exportregeling’ and the ‘e-zone regeling’, and that Curacao needs to change them in conformity with OECD rules. In this respect, the Government has a bill to change the 3 regimes. In the bill the Government will introduce other propositions to stimulate the economy of Curacao.
In the framework of the Nexus approach of BEPS 5, in which you cannot have intellectual property (IP) without substance, OECD also evaluated Curacao. OECD concluded that the intellectual property stated in the law with regard to the ‘vrijgestelde vennootschap’ and the ‘exportregeling’ has no substance and Curacao will have to adapt them before 1 July 2018. Because a bill trajectory is long, to avoid 1 July 2018 and the law of intellectual property (IP) in ‘vrijgestelde vennootschap’ from arriving (without any action) and to avoid an unedited ‘exportregeling’, the Government has chosen to remove the part of intellectual property without substance from the ‘vrijgestelde vennootschap’ and the ‘exportregeling’ in this law. In the other bill, as previously mentioned, the Government will make other proposals for the ‘vrijgestelde vennootschap and ‘the exportregeling’.
SPF will remain exonerated from tax on profit. The part of this bill will be implemented in 2019. Consequently, the first tax declaration will take place in 2020.