The option for employees working remotely has been increasing in popularity worldwide. Besides the boom of self-employed “Digital Nomads” larger corporations and multinationals are also allowing their workers to work remotely in other countries. As a tropical destination with an all-year-round attractive climate, Sint Maarten also welcomes the remote workers to its shores. Besides immigration procedures, the tax implications can become a hurdle. In the following we provide valuable insight in this tax regime.
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Based on recently introduced legislation it is now officially possible for foreign nationals to perform work in Sint Maarten for a short duration, without incurring Personal income tax exposure in Sint Maarten. The two main conditions that should be met are as follows:
- The remote worker does not stay in Sint Maarten (Dutch part) for longer than 183 days in a 12-months period.
- The remote worker does not receive payment from any (deemed) employer(or withholding agent)
Payroll taxes
Foreign employers allowing their employees to temporarily live and work in Sint Maarten can be become (deemed) withholding agents for wages tax and social insurance premium levies, altogether commonly referred to as Payroll taxes. Provided that the employee does not exceed the 183-days limit in a 12-months period in Sint Maarten, there should be no Payroll tax exposure in Sint Maarten for the foreign employer.
Profit tax
In principle, having a fixed place of business and/or a representative of a foreign company in Sint Maarten could render a permanent establishment for Profit tax purposes (the Sint Maarten equivalent of Corporate Income tax). Pursuant to the recent legislative changes, the definition of a permanent establishment has been adjusted to allow foreign legal entities a timeframe of 183 days in a 12-months period to conduct business in Sint Maarten without incurring Profit tax exposure.
Turnover tax
Turnover realized by businesses and (individuals) entrepreneurs established in Sint Maarten, with supply of goods or services, is subject to a Turnover tax at the rate of 5%. Although the legislative changes do not include provisions for Turnover tax, it can be helpful to obtain assistance from a tax advisor to determine if the presence of the remote worker in Sint Maarten would lead to Turnover tax exposure.
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Quincy Lont