Law proposal Tax plan for Bonaire, St. Eustatius, and Saba
The Cabinet wants to adjust the tax system of Bonaire, St. Eustatius, and Bonaire in order that it becomes more straightforward and more in line with the Dutch tax system. The Cabinet also wants to distribute the burden more evenly. The House of Representatives and the Senate still need to approve the plans.
The Law Proposal Tax plan 2025 contains important measures for citizens and businesses on Bonaire, St. Eustatius, and Saba. This proposal was sent to the House of Representatives on Budget Day (“Prinsjesdag”). Once the proposal has been approved by the House of Representatives and the Senate, the measures will take effect on the 1st of January 2025.
What do the measures mean to you?
Below you can find the main changes for citizens and businesses. For a complete overview, we refer to the documents from Budget Day.
https://www.rijksoverheid.nl/onderwerpen/belastingplan/belastingplanstukken
Important changes for citizens:
No income tax on minimum wage
An important change for citizens is that it is now established in law that people earning the minimum wage no longer need to pay income tax. To achieve this, the tax-free allowance is linked to the statutory minimum wage in the Caribbean Netherlands.
Entry amount 2nd income tax bracket lowered
The Cabinet proposes to lower the entry amount of the 2nd tax bracket from USD 322,769 to USD 50,000 with effect from the 1st of January 2025. This will put residents earning at least USD 70,728 in the 2nd bracket in 2025. They then pay a higher tax rate on the taxable income exceeding USD 70,728. With this proposal, the Cabinet wants to distribute income tax more fairly and tax higher incomes more.
Important changes for entrepreneurs:
Property tax rate for hotels from 10% to 11%
The Cabinet proposes to increase the tax rate on property used by hotels from 10% to 11% with effect from the 1st of January 2025. This increase is prompted by the fact that the hotel sector has recovered in recent years and the lower rate, in force since 2013, is no longer necessary.
Yield tax and substantial interest rate from 5% to 7.5%
It is also proposed to increase the yield tax and substantial interest rate from 5% to 7.5%. This means entrepreneurs with a private limited company (BV) will be paying more tax on the profits. With this increase, the Cabinet wants to bring the tax rate closer to the Dutch and international level.
Annual adjustment threshold small business scheme (KOR)
Another important measure is that with effect from 2026, the threshold for the small business scheme (KOR) is adjusted annually in line with the inflation rate, so that small entrepreneurs can continue to benefit from this scheme.
Compulsory identification of employees
In addition, the Cabinet proposes to introduce an identification requirement for employees effective from the 1st of January 2025. Entrepreneurs will then be required to ask for a copy of the identity document of the employee and keep the copy in the payroll administration. With this, the Cabinet wants to prevent employees from working undeclared and prevent employers and employees from not paying taxes as a result.
Approval process
The plans are part of the Tax plan 2025 and are addressed in the Law Proposal Tax plan BES Islands 2025. The approval of the House of Representatives and the Senate is still required before these measures can be introduced. The relevant vote is expected in November and December 2024.