WILLEMSTAD — The Curaçao government has formally submitted the 2024 Minimum Tax Ordinance to Parliament, pressing ahead with the legislation despite ongoing warnings about legal vulnerabilities and serious implementation challenges. Accompanying documents make clear that Curaçao is acting under international pressure, opting for rapid introduction of the minimum tax to prevent other countries from taxing the profits of multinational companies based on the island.
The proposed legislation stems from agreements within the Organisation for Economic Co-operation and Development on a global minimum effective tax rate of 15 percent for large multinational groups. In the explanatory memorandum, the government argues that delaying or abandoning implementation would result in lost tax revenues, as other jurisdictions would then gain the right to impose the additional levy.
Legal vulnerabilities flagged
At the same time, the advisory opinion of the Advisory Council highlights significant legal risks. The council raises particular concerns about the government’s intention to apply parts of the minimum tax retroactively.
According to the advisory council, retroactive legislation is permissible only under exceptional circumstances, which were insufficiently substantiated in the original explanation. The council also emphasizes that companies may not be subjected retroactively to punitive sanctions for obligations that were not clearly foreseeable at the time.
Execution not yet ready
Beyond legal concerns, the advisory council warns of serious implementation problems. The Tax Department Curaçao does not yet have all required implementing regulations in place, and the digital filing portal for the minimum tax remains incomplete. Both the government and affected companies, the council says, need sufficient time to prepare for the new compliance requirements.
The advisory opinion also points to additional costs related to system upgrades and stresses the need for specialized expertise within the tax administration.
Government presses ahead
In a subsequent response, the government addresses parts of the criticism, stating that the explanatory memorandum has been amended and that sanctions will, in principle, apply only to obligations from the 2025 tax year onward. The government also pledges to finalize implementing regulations and the filing system as quickly as possible.
However, the core policy remains unchanged. With the formal submission of the bill to the Parliament of Curaçao, the government has chosen to continue the legislative process, effectively shifting part of the legal and operational risk to the implementation phase.
In the coming weeks, Parliament will debate the proposal, with the central tension likely to revolve around balancing international tax obligations, legal certainty for businesses, and the practical feasibility of enforcing the new minimum tax regime.