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Aruba delays 12.5% VAT implementation until 2024

Global inflation concerns pushes introduction of VAT back further year; 1% turnover tax rise in meantime

The Dutch Caribbean dependency has delayed the introduction of VAT a further year to 1 January 2024. The latest postponement was announced based on global inflation worries and the effects of the Russian invasion of the Caribbean.

2023 Rise in turnover taxes

VAT will replace the existing 6% combined Turnover Tax (BBO) and Health Tax (BAZV). This is based on support from the OECD on the design of the new indirect tax. This rate will be increased to 7% from 1 January 2023.

Aruba, along with Bonaire and Curaçao are part of the Netherlands. It is largely dependant on tourism. The new tax is being coordinated with the Dutch, who tied the new indirect tax to the funding package provided during the COVID-19 pandemic.

The average VAT rate for the Caribbean Islands is 16%. Aruba would join the 171 country to introduce VAT.

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