Between September 2024 and March 2025, Aruba is actively modernizing its tax system. These reforms are essential to stimulate economic growth, achieve international compliance, and ensure fair taxation. The reform program includes a new corporate tax rate, revisions to existing tax legislation, and strengthening the tax authority. Below are the key reform points based on the Implementation Agenda and Report of the Aruba Country Package.

Stimulating 15% Corporate Tax Rate

One of the most notable reforms is the introduction of a 15% corporate tax rate. This rate aims to promote investments in promising sectors such as the knowledge economy, agriculture, circular economy, and niche tourism. By creating a competitive tax climate, Aruba seeks to diversify and grow its economy. Although implementation is scheduled for Q1 2027, preparations are already underway, focusing on drafting legislation aligned with international standards.

Simplification and International Compliance

The 2006 Joint Venture Scheme is being simplified to make fiscal units more attractive to businesses. This initiative complements a revision of the 2000 Free Zone Ordinance, which will be aligned with OECD/BEPS Action 5 standards. These reforms not only ensure more efficient tax management but also compliance with international regulations. By combating tax avoidance, Aruba strengthens its reputation as a reliable tax jurisdiction. The legislation is expected in Q1 2027 after an intensive preparation period.

Withholding Taxes and Technological Innovation

Another major reform involves exploring the introduction of withholding taxes on management fees and royalties. This measure aims to curb tax avoidance through cross-border payments. Simultaneously, the tax authority is investing in technological innovations, such as electronic filing and automated risk management. These advancements enhance the efficiency and reliability of tax collection while reducing tax evasion. The implementation of withholding taxes is expected in Q4 2026.

Capacity Building and Risk-Based Enforcement

In collaboration with the Dutch Fiscal Information and Investigation Service (FIOD), Aruba is expanding the capacity of its tax authority. The project, which begins in early 2025, focuses on training, strategic planning, and strengthening investigative capabilities. This aligns with the introduction of risk-based controls, enabling the tax authority to more effectively tackle tax evasion. Simultaneously, the backlog in processing tax objections is being addressed, with completion targeted for Q4 2026.

Impacts on Aruba’s Future

The reforms will have a broad impact on Aruba’s economy and society. By making taxation fairer and more transparent, taxpayer confidence in the system is improved. At the same time, the reforms lay a solid foundation for generating the structural revenue needed for economic growth and social development. The combination of technological advancements, international compliance, and enhanced capacities enables Aruba to future-proof its tax system.

These reforms, detailed in the Implementation Agenda and Report of the Aruba Country Package (pages 22-27), demonstrate Aruba’s commitment to a sustainable economic future. With attention to both national and international interests, the country continues to strive for innovation and efficiency in its fiscal policies.