The Sector Director of Fiscal Affairs issued a policy on January 10th, 2024, regarding the temporary tightening of criminal prosecution for failure to file profit tax returns.
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With a press release, the Ministry of Finance/the Tax Administration of Curaçao has announced several policy changes regarding the levy of profit tax. The press release was posted on the personal Facebook page of the Minister of Finance, Mr. mr. drs. Javier Fransisco Antonio Silvania (Javier Silvania).
Introduction
When it comes to taxes, it is important that taxpayers are treated equally, and that everyone contributes according to their capacity. For this reason, Finance Minister Javier Silvania, has strongly emphasized the increase in tax compliance. Tax revenues have significantly risen ever since he has taken office. As of 2023, the profit tax rate has decreased from 22% to 15% for the first NAf. 500.000 of taxable profit. Such rate reductions are only possible when every taxpayers are meeting their obligations.
Motive (Compliance)
Approximately 55% of taxpayers comply with the filing obligations for profit tax. This number is considerably low. Therefore, a compliance plan from the Stichting Belastingaccountants-bureau (SBAB) has been approved. This policy is temporary. It aims to reduce non-compliance and encourage taxpayers to fulfill their profit tax filing obligations. Non-compliance with this obligation has severe consequences. Not meeting this obligation on time harms:
1. the functioning of the Inspection as it forces them to impose definitive assessments with fines
2. the national interest
The Plan
Firstly, in April 2024, a provisional profit tax assessment for 2023 will be imposed based on the provisional profit tax return over the year 2023. Entrepreneurs who fail to submit this before April 1, 2024, may receive a tax assessment with a fine within weeks.
Second of all, the final assessments for non-submitted profit tax returns will be Increased. The Tax Authorities found that some entrepreneurs prefer paying the final assessment instead of filing the profit tax return, indicating the assessment is too low. Entrepreneurs who haven’t filed Profit Tax returns for 2019 onward may face higher additional assessments.
Finally, in 2024, no extension is required for submitting the 2023 final profit tax return. Entrepreneurs can submit it by December 31, 2024, offering administrative relief for both entrepreneurs and Tax Authorities.
It is important to note that, starting in 2019, the ‘stichting particulier fonds’ (SPF) is obligated to annually file its profit tax report. Directors of the SPF also face the risk of prosecution if the SPF fails to meet its filing obligations.
Contact
Our team of seasoned tax practitioners can assist you with the filing of your profit tax return of your business in Curaçao.
Should you have any questions regarding this announcement, please do not hesitate to contact us. Our team would be more than happy to assist you with your questions.
Key Contact
Vivian Pieters