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Ministerial Decree on Real Presence    

Tax Newsflash Curaçao

September 2019

The requirement of real presence (substance) is currently being imposed on two regimes with a rate lower than the general rate, namely the e-zone with a rate of 2% and the Curaçao investment company with a rate of 0%.

For Curaçao profit tax purposes real presence will be deemed to exist if a corporate entity carries out activities and generates income that meet the following 2 cumulative requirements:

1. The company (in)directly employs a number of qualified employees that is appropriate with the nature and extent of the activities of the company or the group of related entities; and

2. The company has annually recurring expenses that are appropriate with the nature and the extent of the activities of the company or the group of related entities.

However, it  was desirable to implement and further substantiate the concept of real presence. As a result, the Minister of Finance issued Ministerial Decree with general effect that further elaborates the real presence concept.

This ministerial decree provides a manual of conditions that must at least be complied with, in order to have substance, emphasizing that the required scope of the substance is related to the scope of the activities of the company. 

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