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Tax
Instant Curaçao:
Update - Government
News takes measures related
to COVID-19
(Corona virus)
Phase 1 and 2
On March 23, 2020 the government of Curaçao
published a solidarity package (phase 1) due to the
worldwide outbreak of the Coronavirus with the
primary goal to safeguard jobs. In our previous TIN,
we generally outlined the tax measures. In this TIN,
we will further elaborate on the Instruction Solidarity
Package of support measures on COVID-19 and the
emergency support package (phase 2) announced
on 3 April 2020.
Curaçao, April 2020
1.1
Background and purpose Payment arrangements and
Tax Taking into account the health care
system and the socio-economic
penalties
On request, existing payment
impact that COVID-19 has on arrangements for outstanding tax
Instant society, the government introduced
support measures with the aim to
and premium debts can be
suspended (deferred payment).
enable employers to continue to pay
News their staff and to bridge the burden
via eased tax provisions in order for
businesses to have liquidity in order
The recovery measures will be
immediately suspended upon receipt
of the aforementioned request(s).
to meet their obligations. Subsequently, the Receivers Office
will assess whether the taxpayer is
The Solidarity Package (phase 1) eligible for suspension, adjustment
has its legal basis in two notices of the current payment arrangement
called Instruction Solidarity Package or the agreement of a payment
of support measures for COVID-19, arrangement.
which are discussed below. We will
then pay attention to the announced The declaration obligation is not
emergency support package (phase suspended for any type of tax.
2) and briefly discuss some Furthermore, the monthly tax returns
measures taken by the Central Bank up to and including the period
of Curaçao and Sint Maarten. February 2020 must be submitted
and paid. Note: suspended taxes
Solidarity package (phase 1) must still be paid at a later date.
The affected sectors have been
further defined and concern the The foregoing also applies to new
hospitality sector, beauty salons, requests for deferral of payment
travel industry, car rentals, car wash, arrangements for all taxes and non-
tour buses, taxis, bus transport (both taxes collected by the Tax Collector.
small buses and buses of the
Curaçao bus company) and In addition, during the period from
transport for school-aged children. April 1, 2020 to June 30, 2020:
These facilities apply for the months - The recovery interest is set at 0%;
of April to June 2020, unless
- The collection costs are not
otherwise indicated. If necessary, charged;
these facilities can be extended for 3
- A default penalty for non-payment,
months at a time.
partial or late payment of tax is
omitted.
Social premiums: Exemption Other
from employer's contributions to Some other measures announced
AOV / AWW in phase 1 are:
With regard to social contributions, - Establishing maximum wholesale
employers in the affected sectors will margin and retail margin for
be exempted from having to essential products to limit the
spread of COVID-19 (already
compensate and pay the employer's
entered into force);
contribution of AOV / AWW premium
(9.5%) for the periods of April, May
- Various support and advice
programs for companies;
and June 2020, provided that the
employer : - A credit and financing program
that will be expanded in phase 2.
- Continues to pay the wages to
its employees; Emergency support package
- Does not apply for dismissal (phase 2)
during the allowance period. On April 3, 2020, the government
Sales tax announced measures regarding the
With regard to the entrepreneurs in emergency support package. First of
the affected sectors, it should be all, it must be stated that the Curaçao
noted that these entrepreneurs still government does not have its own
have to charge the sales tax and file resources to finance these phase 2
the monthly tax return. However, the measures. In other words, these
turnover tax charged does not have measures can only be implemented
to be paid to the Tax Collector for if financial support is provided from
liquidity purposes of the the Netherlands. A decision
entrepreneur. regarding financial support by the
Netherlands is expected to be taken
Import duties and sales tax on on Thursday 9 April 2020. These
import measures are discussed below.
The rates on the following essential
goods are temporarily reduced to 0% Emergency measure Bridging
for import duties and 0% for import Employment (“EME”)
sales tax: To maintain as many workplaces as
possible, financial support is offered
- Latex and silicone gloves;
to the employer with an estimated
- Hand disinfectants;
loss of income of at least 25%. This
- Disinfection wipes and sprays; can be used to offset a minimum of
- Cleaning alcohol (70% or more); 20% to a maximum of 80% of
- Thermometers; monthly wage costs.
Example: The financial support
- Face masks/mouth masks.
amounts to NAf. 4,000 with aturnover loss of 100% against a - The self-employed entrepreneur
financial contribution of 80% with a must be registered, resident and
gross monthly wage of NAf. 5,000. primarily working in Curaçao;
The following conditions apply for - The self-employed person must
the application of the EME: be registered with the Chamber of
Commerce before March 17,
- The allowance applies to a 2020 (an exception applies to the
maximum gross monthly wage
taxi industry and bus drivers);
equal to the Social Insurance
Bank wage limit of NAf. 5,781; - The sales tax return must be
submitted monthly and the
- Taxes and social security charges returns from January 2020 up to
must be paid to prevent loss of
and including the month prior to
income of the government, taking
the request for assistance must
into account the measures
have been submitted.
mentioned in phase 1;
- The employee may not be fired. Job loss allowance
The sectors to which this measure It is foreseen that mainly flex workers
will apply will be announced in more will lose their job first during this
detail. period. However, this measure also
applies to redundant permanent
Temporary (personal) assistance workers, although dismissal of
for independent entrepreneurs permanent workers is discouraged
Self-employed entrepreneurs can as much as possible. Anyone who
qualify for financial support for a has become unemployed from
period of 3 months with retroactive March 15, 2020 is eligible for a
effect from April 1, 2020. A request compensation of up to NAf.1,000 per
thereto must be submitted ultimately month.
by June 30. This temporary This benefit amounts to 60% of the
maintenance assistance minimum wage, but will not exceed
supplements the income up to a the average of the income earned in
maximum amount of NAf. 1,335 per the last 2 months.
month (80% of the minimum wage). Furthermore, the benefit applies for
It should be noted that this measure a period of 3 months with the
also applies to legal entities of which possibility of an extension of three
the director of the major shareholder months.
is the only employee.
The conditions for eligibility are: Credit facility small and medium-
- The self-employed person must sized companies / self-employed
declare that the income in the entrepreneurs
next 3 months will be less than The financing option already
the minimum wage; introduced in phase 1 is expanded in
phase 2. It will be possible forentrepreneurs with micro, small or - Reports are provided during the
medium-sized companies in the loan maturity.
affected sectors to take out a one- In addition, free training and advice
time loan of a maximum of NAf will be provided based on the
100,000 to cover fixed costs. This specific needs of each company to
loan has a maximum maturity of 3 increase the expertise and capacity
years, of which the first 6 months are of the entrepreneurs.
redemption free at 2% interest and
thereafter at 6% interest. Care compensation
Finally, a compensation will be
granted to organizations and
The conditions for companies to
persons who provide support and
qualify for the above credit facilities
care (including care for the elderly,
are as follows:
the disabled and families with
- Companies should meet the size
criteria for micro, small and children). More details on this will
medium-sized companies be announced later.
Revenue (mio Emplo
NAf ) yees. Other measures Central Bank of
Micro < 0,5 1-4 Curaçao and Sint Maarten
Small < 0,5 5-9 ("CBCS")
Medium-
sized > 0,5 < 5 10-49 CBCS also indicated, by means of a
publication in the local newspapers
- Activities have been discontinued of 23 March 2020, that it is taking the
completely or partially due to
government measures; following measures in connection
with the Corona crisis:
- The company must be
established in Curaçao and the - Lowering the interest rate on
owner / director must have a valid loans between CBCS and banks,
ID / residence document; the lending rate, to 1.00%. The
surcharge on the loan interest on
- The company is registered with loans of more than 20 million is
the Chamber of Commerce or temporarily suspended;
must still register;
- The reintroduction of the
- There must be at least 6 months possibility for banks to be
of operational activities (since 1 overdrawn at CBCS;
October 2019);
- Lowering the interest on
- Financial data must be submitted Certificates of Deposit (CD's);
showing the need for help with
future forecast and the purpose of - Suspending the provision of a
the loan; foreign exchange license for
transferring funds abroad,
- An adjustment to the business including applications that have
model has taken place in already been submitted and that
connection with Covid-19 (where have not yet been processed;
necessary) or is prepared for this;- Redemption and interest-free
period of 3 to 6 months for banks
and credit institutions, for which
no provision must be formed;
- Temporary exceed the debt-
service ratio (currently: 37%) to
50% for banks;
- Deferral of policy premiums by
policyholders for 3 to 6 months
from life insurers and pension
institutions, for which no provision
must be formed.
Closure
We will keep you informed if new
developments occur and / or further
detailed conditions are announced.
Should you require
more information, please do not
hesitate to contact us.
***************Joris Mulder mulder.joris@hbnlawtax.com Rejauna Rojer rojer.rejauna@hbnlawtax.com Nicole Echobardo echobardo.nicole@hbnlawtax.com
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