WILLEMSTAD — The Advisory Council (Raad van Advies) has warned that Curaçao’s proposed minimum tax for multinational companies is insufficiently developed from both a legal and an implementation perspective. In particular, the council raises serious concerns about the planned retroactive application of the tax.
The minimum tax is intended to align Curaçao with international agreements under the Organisation for Economic Co-operation and Development (OECD), which require countries to levy an effective tax rate of at least 15 percent on large multinational groups. According to the government, swift implementation is necessary to prevent other countries from collecting the tax instead, which could result in Curaçao losing potential tax revenues.
Retroactive application under scrutiny
While acknowledging the international pressure to implement the OECD rules, the Advisory Council stresses that retroactive legislation is only permissible under exceptional circumstances. In the current bill, the council says, those circumstances are not sufficiently substantiated.
If the government nevertheless insists on applying the minimum tax retroactively, it must explicitly and independently justify this choice in the explanatory memorandum accompanying the legislation, the council advises. Moreover, it emphasizes that no punitive or aggravating sanctions may be imposed on taxpayers for the period to which retroactive application would apply.
According to the council, companies should not be penalized after the fact for obligations that were not clearly defined or sufficiently foreseeable at the time.
Concerns about implementation readiness
The Advisory Council also expresses concern about the practical enforceability of the proposed legislation. It notes that key implementing regulations have yet to be finalized and that the digital filing portal for the minimum tax is not ready.
Both the Tax Department and the companies affected will require sufficient time to adapt to the new reporting and compliance requirements, the council warns.
Significant costs for government
The advisory opinion further highlights the financial impact of introducing the minimum tax. Adjustments to systems and processes at the Tax Department are expected to require a one-time investment of approximately half a million guilders, followed by recurring annual costs of around 100,000 guilders.
The council advises the government to clearly reflect these expenses in the financial explanation accompanying the bill.
In its conclusion, the Raad van Advies urges the government to first complete the necessary implementing regulations and to carefully follow the full legislative process before submitting the bill to the Parliament of Curaçao. According to the council, this is essential to avoid legal vulnerabilities, implementation problems, and uncertainty for businesses operating in Curaçao.