Aruba Fiscal Plan 2023 — Part II Tax changes

Local contact

EY Global

2 Aug 2023
Subject Tax Alert
Categories Corporate Tax
Jurisdictions Aruba
  • Legislation recently approved in Aruba introduces a tax on imported goods, effective 1 August 2023.
  • This Alert highlights the key aspects of the new law.
  • Affected taxpayers will want to become familiar with the changes, including a refund mechanism.

Executive summary

On 5 July 2023, the Parliament of Aruba approved tax legislation, titled "Fiscal Plan 2023 — Part II," which extends the changes implemented via the State Ordinance Fiscal Plan 2023. The main change in the Fiscal Plan 2023 — Part II introduces a tax on the import of goods, the so-called "BBO1 on import" or "BBO at the border," which will take effect as of 1 August 2023. Other changes will have a retroactive effect to 1 January 2023. This Tax Alert provides an update on the following topics:

  • New tax on import of goods
  • Import duty changes
  • An expanded investment allowance on foreign investments
Tax on import of goods

A tax on import of goods will be levied as of 1 August 2023. The rate of this "BBO on import" will be 7%, which is the same as the total rate of the BBO/BAVP/BAZV.2 Currently, the import of goods in Aruba is not subject to an indirect tax (e.g., BBO/BAVP/BAZV) other than import duties, while local supply of goods is subject to BBO/BAVP/BAZV at a rate of 7%. Because of this, self-import of goods may be more attractive to businesses and the public than purchasing goods locally. With the introduction of a tax on import of goods, the Government aims to level the playing field, increase its tax revenues and improve compliance with the BBO/BAVP/ BAZV legislation.

Businesses may deduct the tax on import of so-called "trade goods" from the BBO/BAVP/BAZV on their sales. In certain cases, this may result in a refund of BBO/BAVP/BAZV.

Import of goods

Import of goods will become a new taxable event. The import of goods is defined as releasing the goods for free circulation (in Dutch: "in het vrije verkeer brengen") in Aruba. Goods are generally considered released for free circulation if a customs declaration is filed, all customs requirements are fulfilled (i.e., if a C-number is generated) and the goods are no longer under the supervision of the customs authority. The party in whose name the goods are imported should be responsible for filing the import declaration and paying the tax on import.

The tax on import of goods will be due in addition to import duties and should be paid simultaneously with the import duties.

Bonded warehouse

Although not specifically regulated in the draft legislation, the explanatory notes indicate that goods that are stored in a bonded warehouse (in Dutch "douane entrepot") will not be subject to the tax on import upon storage. The tax on import will be due (like the import and excise duties) after the goods are transferred from a bonded warehouse (i.e., brought into free circulation).

Taxable amount

The taxable amount for the tax on import of goods is the customs value. The customs value is the value of the imported goods as of the moment they cross the border, which includes all expenses made to import the goods, such as cost, insurance and freight (CIF value).

Refund mechanism

A refund mechanism will be introduced for the tax on the import of so-called "trade goods" by entrepreneurs. This means that businesses that paid the tax on the import of goods intended for resale are entitled to reclaim this tax. The business can offset the tax on import only if it fulfills the invoicing/cash register system requirements.

The total tax on the import of goods paid to the customs authority in a reporting period (month) will be pre-filled in the BBO/BAVP/BAZV return in the Bo Impuesto (Boi) portal of the taxpayer. The amount of tax paid on import of trade goods (only) should be reclaimed by offsetting the amount in the BBO/BAVP/BAZV return of the reporting period in which the import of these goods took place. The trade goods do not have to be resold when the tax on import of those goods is reclaimed.

If the amount of tax on import is higher than the amount of the BBO/BAVP/BAZV due in a reporting period, the difference (i.e., a refund) will be paid back to the business. Refer to the following example.


Company X imports the following goods in August 2023:

  • Computers for own use with a customs value of 10,000 Aruban florin (AWG 10,000)
  • Trade goods with a customs value of AWG 15,000

The total tax on import amounts to AWG 1,750.

Company X has a revenue for BBO/BAVP/BAZV in August 2023 of AWG 12,000. Company X should report in its August 2023 return:

BBO/BAVP/BAZV due on sales

AWG 840

Tax on import of trade goods (deductible)

AWG 1,050

Refund decree August 2023

AWG 210

The Tax Authorities will issue a refund decree to formalize the refund. According to the Parliamentary documents, the Tax Authorities will automatically pay out the refund within eight weeks after filing a BBO/BAVP/BAZV return. However, if the business has other outstanding taxes or social premiums due, the refund will be settled with these first. Businesses that apply the small business regulation ("kleine ondernemingsregeling" or "KOR") are not entitled to reclaim any tax on import.

The tax paid on import of goods by individuals (e.g., on internet orders) and businesses that self-import assets (e.g., furniture and computers for own use) cannot reclaim the tax paid on import of these goods.

Trade goods

Trade goods are defined as goods meant for resale. Resale is defined as the reselling of imported goods without further processing, e.g., wholesalers and retailers.

The Parliamentary documents dictate that the term should be interpreted narrowly, thus not including goods that are processed or assembled in one's own business to a new trade good. Based on the Explanatory notes, goods imported by hotels and restaurants are excluded from the term "trade goods." However, the Tax Authorities indicated in their FAQs, that the Minister will evaluate the possibility of reclaiming the tax paid on goods imported by the Food and Beverage sector. Furthermore, contrary to the Parliamentary documents, a publication of the Tax Authorities seems to indicate that the term "trade goods" would be broadened to apply to any good that is imported with the intention of being resold (i.e., also goods that are processed and assembled to a new good meant for sale). In that case, the tax paid on import of these goods can also be reclaimed. The Tax Authorities offer the following examples:

  • A bike shop imports the parts of a bike and self-assembles the bikes for sale.
  • A company imports tortilla, ground beef and cheese and sells these as tacos.
  • A supermarket imports cheese and cuts these into slices or blocks, with or without spices, to be sold.
  • A supermarket imports chicken breast and processes it into ground chicken, rotisserie chicken, chicken cutlets as well as seasoned chicken and chicken salad to be sold.
  • A supermarket imports tuna cans and processes these into tuna salad to be sold.
  • A supermarket imports oranges and processes these into orange juice to be sold.
Transitional rules

No transitional rules will apply for the tax on import or the refund mechanism. In other words, all goods that are released into free circulation as of 1 August 2023 will be subject to the new tax on imported goods.

Importers who file a custom declaration before 1 August 2023 and have paid the import duties (and excise duties) due before this date, can remove/move containers after 1 August 2023 and no import tax will be due.

Exemptions and waivers

Imported goods that are exempt from import duties will also be exempt from the tax on import of goods (e.g., machinery and raw materials for local producers). The same applies to import of goods for which the import duties are waived (e.g., goods that serve a scientific purpose).

Formal requirements

The formal requirements for the levy, refund, additional assessments and penal provisions of the import duties are also applicable to the tax on import of goods. For instance, a person is entitled to recover any overpaid tax on import of goods (same as import duties) within one year of payment.

Import duty amendments

Due to the introduction of the tax on import and to simplify, modernize and streamline the system of import duty tariffs, the Government intends to amend the custom duty tariffs.

The proposed reduction in tariffs will go into effect as of 1 August 2023 via a beneficial policy that will be published soon. The proposed tariff increases will go into effect after the concerning draft legislation is approved by the Parliament of Aruba. The tariff changes will be as follows:

























As an example, the followings goods will have a reduction in import duty:

Certain food products (e.g., frozen vegetables, frozen fruit, yogurt, chocolate milk)

6%/12% to 0%

Energy-efficient products (e.g., electric cars, inverter equipment, solar panels)

2% to 0%

Certain construction materials (e.g., tiles, prefabricated building elements)

10% to 6%

Motor vehicles

30%/40%/50% to 32%

As an example, the followings goods will have an increase in import duty:

Jewelry, perfume and cosmetic products

3% to 6%

Cigars and fireworks

57% to 62%

Other changes — investment allowance

As of 1 January 2023, the investment allowance (of 10%) was, in principle, only applicable to qualifying investments in locally purchased goods. Based on the Fiscal Plan 2023 — Part II, the investment allowance may now also be claimed with retroactive effect to 1 January 2023 on qualifying investments in goods to be imported for local use in the business.

Next steps

EY will continue to monitor developments related to the above measures and provide further updates and insights as developments occur. Please reach out to our tax advisors for further assistance or to discuss any questions you may have.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Tax Advisors Dutch Caribbean
  • Rose Boeve
  • Anushka Lew Jen Tai
  • Fong-Mang Cheong
  • Stefan van Riezen
  • Alitza Hart-Koolman
  • Amey Joubert
  • Gerald Moreta
  • Lauren Trompe

Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.