WILLEMSTAD - The Court of First Instance of Curaçao has ruled that renting out real estate for vacation purposes is almost always considered an economic activity, meaning property owners automatically qualify as entrepreneurs for turnover tax (OB) purposes.
The decision was issued on November 25 in a case involving a Netherlands-based owner who rents out three villas on Curaçao on a year-round basis. A tax audit showed that the properties were consistently rented through platforms such as Airbnb, Micazu and VRBO, generating monthly income.
According to the Court, such activities clearly constitute the exploitation of assets with the intent of obtaining sustainable revenue. The fact that income may fluctuate from stay to stay, or that earnings are not guaranteed, does not change the commercial nature of the activity.
Back Taxes and Fines Upheld
As a result, the Tax Authorities were entitled to impose additional turnover tax assessments. Three assessments were reviewed by the Court. The objection to the November 2023 assessment was declared inadmissible because it was filed too late.
The additional assessments and penalties for December 2023 and January 2024 were fully upheld. Although the owner filed tax returns, he failed to pay the owed tax on time, resulting in NAf 150 fines for each period.
Implications for Vacation Rentals on Curaçao
The ruling reinforces that private individuals renting out vacation properties on Curaçao are, in practice, liable for turnover tax—even if they live abroad. The judgment adds clarity at a time when short-term tourist rentals continue to expand across the island.