FOREIGN COMPANIES AND TAX LIABILITY UNDER THE LAWS OF THE NETHERLANDS ANTILLES
A permanent establishment qualifies for tax liability
There will be a tax liability when the activities of a foreign company on the Netherlands Antilles can be qualified as a permanent establishment, as on the Netherlands Antilles profit tax (and private income tax) is levied from companies (and one-man enterprises), who carry on a business through a permanent establishment within the Netherlands Antilles. In this regard based on the National Ordinance on profit tax 1940 the definition for permanent establishment is as follows:
A. a fixed place of business through which the business of an enterprise is wholly or partly carried on and includes especially:
1. a place of management;
2. a branch;
3. an office;
4. a factory;
5. a workshop, and
6. any place of extraction of natural resources
B. a permanent representative.
The term permanent establishment shall be deemed not to include (i) the maintenance of a stock of goods or merchandise belongings to the enterprise solely for the purpose of storage or display, (ii) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise for the enterprise and (iii) the maintenance of a fixed place solely for advertising purposes, for collecting and providing information, for academic research and similar activities, in the event that the activities are of a preparatory or auxiliary character.
Additionally the term ‘permanent representative’ is defined as a person that is acting on behalf of an enterprise and has, and habitually exercises, an authority to conclude contracts in the name of the enterprise, in that other country.
Karel Frielink
Curacao-based Attorney (lawyer) / Partner
