Aruba Income Tax Rates

Aruba individual income tax rates for 2009 are progressively up to a maximum of 58.95%. Aruba individual income tax is levied at progressive rates and the tax bands are adjusted annually for inflation.

There are two schedules of personal income tax in Aruba:

1) Schedule 1 applies to:
- A married taxpayer whose spouse do not have earned income
- A married taxpayer who has opted for joint taxation
- An employee who was married for at least 5 years but is now permanently separated or divorced
- An unmarried taxpayer who claims child allowance

2) Schedule 2 applies to:
- All other taxpayers that do not satisfy the conditions for Schedule 1.

For the calculation of the 2009 personal income tax, a taxable income for an amount of AWG 20,252 is tax exempt.

Aruba Individual Income Tax Rates for 2009 - Tax Rates for Schedule 1
Taxable Income (AWG) / Tax Rate for Schedule 1

AWG 0 - 7,118                         7.00%
AWG 7,118 - 16,759                 9.55%
AWG 16,759 - 27,555              13.70%
AWG 27,555 - 39,888              18.00%
AWG 39,888 - 53,593              23.50%
AWG 53,593 - 68,944              29.00%
AWG 68,944 - 83,020              34.10%
AWG 83,020 - 98,189              38.00%
AWG 98,189 - 117,528            41.75%
AWG 117,528 - 145,448          43.20%
AWG 145,448 - 186,683          46.25%
AWG 186,683 - 250,446          52.00%
AWG 250,446 - 296,956          54.20%
AWG 296,956 and above         55.85%

Aruba Individual Income Tax Rates for 2009 - Tax Rates for Schedule 2
Taxable Income (AWG) / Tax Rate for Schedule 2

AWG 0 - 7,118                           7.40%
AWG 7,118 - 16,759                 10.05%
AWG 16,759 - 27,555               14.45%
AWG 27,555 - 39,888               19.00%
AWG 39,888 - 53,593               24.80%
AWG 53,593 - 68,944               30.60%
AWG 68,944 - 83,020               35.95%
AWG 83,020 - 98,189               40.10%
AWG 98,189 - 117,528             44.05%
AWG 117,528 - 145,448           45.60%
AWG 145,448 - 186,683           48.80%
AWG 186,683 - 250,446           54.85%
AWG 250,446 - 296,956           57.20%
AWG 296,956 and above          58.95%

If an individual is considered to be a resident of Aruba, the individual is subject to income tax over his/hers world wide income. If the individual conducts an enterprise, different regulations apply to determine the taxable income, which regulations are similar to the corporate income tax. If you have any income that is taxable in Aruba, it is mandatory to fill in your income tax return. Even if you have not received a income tax return, it is mandatory to request for a tax return from the Aruban tax authorities.

Resident and non-resident individuals are subject to the same rates of income tax.

Sources of Income

Residents of Aruba are subject to income tax on their worldwide income from:
- Income from a business or profession;
- Income from employment;
- Income from property (real estate);
- Income from moving capital;
- Certain periodic receipts (e.g. pension).

A non-resident is subject to Aruban income tax for income derived from amongst others:
- Income from employment (business or profession) performed on Aruba;
- Real estate situated in Aruba;
- Salary received as a managing director or supervisory board member of an Aruba company;
- Dividend income in case the non-resident shareholder holds a substantial interest (25% of the shares or more) in an Aruban company;
- The capital gain realized on the selling of shares in an Aruban company in case of a substantial interest.

It is important to note that a non-resident individual is subject to the individual income tax as soon as he/she works 1 day or more on Aruba.

AOV / AWW Insurance

The maximum premium income with respect to the AOV / AWW (old age pension and widow & orphans pension insurance) contributions has been increased from AWG 52,728 (2008) to AWG 54,600 in 2009. The percentages of premiums due remain the same.

AOV / AWW              /     %     /   2009 (maximum)

Maximum premium       13.5%         AWG 7,371
Employer's part              9.5%         AWG 5,187
Employee's part             4.0%          AWG 2,184

AZV Insurance

The maximum premium income with respect to the AZV (General Health Insurance) contributions has been increased from AWG 75,600 (2008) to AWG 85,000 in 2009. The percentages of premiums due remain the same.

AZV                        /     %     /   2009 (maximum)

Maximum premium       9.5%          AWG 8,075
Employer's part            7.9%          AWG 6,715
Employee's part           1.6%           AWG 1,360

Aruba Corporate Tax Rate

Aruba corporate income tax rate for 2009 is a flat 28%.

Corporate income tax is levied over the profit of an enterprise conducted in Aruba in the form of either an Aruba legal entity (via for example a corporation or a limited liability company) or a permanent establishment / permanent representative of a foreign entity. Corporate income tax is levied on resident and nonresident companies. Local resident companies are incorporated under Aruba civil law. Non resident companies are subject to corporate income tax on certain income such as profits realized by a permanent establishment or income related to real estate in Aruba.

Foreign Tax Credit: Foreign tax paid may be credited against Aruba tax on the same profits, but the credit is limited to the amount of Aruba tax payable on the foreign income.

Withholding Tax on Dividends: A maximum 10% withholding tax can be levied on outgoing dividends, although exemptions are applicable.

Real Property Tax: An annual 0.4% tax is levied on the value of real estate.

Transfer Tax: A 3% transfer tax is levied on the purchase of real estate up to AWG 250,000. Any property sale for a higher amount is taxed at 6%, with the purchaser responsible for paying the tax.

Tax Year: Tax year in Aruba is the calendar year. The book year can be chosen alternatively.

Aruba Turnover Tax

The turnover Tax (BBO) is an indirect tax and is levied on the income realized with the supply of goods or services provided. The standard rate is set at 3%. However, the income realized with the export of goods is subject to a 1% turnover tax.