Main changes from January 1, 2023
Below are the main tax changes that are applicable in the Caribbean Netherlands from January 1, 2023:
- Increase of the tax-free allowance
- Increase of the minimum scope of the customary wage in the income tax BES
- Continuation of the excise duty reduction on petrol implemented from April 1, 2022
- Taxation at the zero rate or exemption of the import, delivery, and installation of solar panels, solar collectors, and wind turbines in the Caribbean Netherlands
Increase of the tax-free allowance
From January 1, 2023, the tax-free allowance will be considerably higher than in previous years, namely $17,352. This is an increase of $5,154 compared to the tax-free allowance of 2022, which amounts to $12,198. (See: Tax free allowance increased to USD 17,352 from the 1st of January 2023).
The tax-free allowance can be taken into account when calculating the income tax, the AOV and the AWW contributions, and the employee's share of the health insurance. The tax-free allowance means that a part of the taxable income is not taxed.
Increase of the minimum scope of the customary wage in the income tax BES
The customary wage scheme means that a substantial interest holder of an entity is deemed to receive a wage that is customary for the level and the duration of their employment. With effect from 2023, the standard amount for application of the customary wage scheme will be adjusted and increased from $14,000 to $25,000.
Continuation of the excise duty reduction on petrol implemented from April 1, 2022
The excise duty reduction on petrol implemented from April 1, 2022 will be extended up to and including June 30, 2023. With effect from July 1, 2023, the temporary reduction of 16 dollar cents on petrol excise duty will be halved (8 dollar cents). Subsequently, with effect from January 1, 2024, rates will revert to the rates, as they were applicable without reductions.
Taxation at the zero rate or exemption of the import, delivery, and installation of solar panels, solar collectors, and wind turbines in the Caribbean Netherlands
From January 1, 2023, the import of solar panels, solar collectors, and wind turbines in the Caribbean Netherlands will be taxed at the zero rate, or exempt from general expenditure tax.
For electricity companies, the delivery and installation of solar panels, solar collectors, and wind turbines will be taxed at the zero rate. The purpose of the zero rate for electricity companies is to avoid cumulation of general expenditure tax when building solar and/or wind farms. An exemption from general expenditure tax is applicable to entrepreneurs other than electricity companies, as also to private individuals.
This change is also applicable, for instance, to the installation of cables, the assembly materials, and so-called optimisers and inverters. And for the modification of the meter cupboard in connection with the purchase of solar panels.
Other related activities, e.g. a possible reinforcement of the roof or installation of a heat pump, do require payment of general expenditure tax.