by g.solano@profoundprojects.comCIFA’s News Flash
Dear Members
In 2020, the new territorial tax legislation, based on which only local income is subject to tax, was introduced. Now the Tax Department has published a new decree with the standards on how to determine what is local income.
Local income consists of all income that is based on any activity in Curacao. As has been communicated in earlier updates, the determination of what is local income and what is foreign income is based on the ratio of local versus foreign direct expenses. The decree includes more detailed explanation on what can be deemed direct expenses and what are sales expenses and indirect expenses, which are not included for calculation of the ratio.
Profit made on business assets such as an office or machinery, will be calculated based on the use of these assets. If they have been used only locally, than any profit with these assets will be deemed local income.
The new regulation only applies to so-called active income. Passive income will always be subject to tax in Curacao. IP income will generally be deemed passive income and thus fully taxed. However insofar the IP income meets the requirements of the socalled IP box, which is based on the guidelines of the OECD, the income will be exempt from tax.
For more information please see attached guidelines.
Kind Regards, CIFA Board
by g.solano@profoundprojects.comCIFA’s vision for 2021
Willemstad, January 10, 2021
What a tough and abnormal year 2020 was! Many people are happy that 2020 is over. All sectors have suffered from the impact of the pandemic. The financial sector has also suffered a dent in local, but also international financial services. Many people have lost their jobs and hope during 2020. “CIFA is positive about 2021, despite the tough past year, considering that there are bright spots on the horizon at the beginning of 2021; vaccination programs are being rolled out and countries have largely organized their financial resources and recovery plans.” At CIFA we have a realistic strategy for 2021. “Our sector is one of the largest sectors of Curaçao and can make a crucial contribution to help the economy back on its feet,” says Mrs. Nacha de Jesus, Chair of the CIFA Board. “Especially in times of uncertainty, we need to be able to dream and look ahead and visualize positive prospects!” True to tradition, CIFA reports on the goals it has achieved over the past year, while announcing its objectives for 2021.
What has been achieved in 2020?
During the past unusual year, CIFA has worked hard to achieve its intended objectives. Board meetings and General Members meeting took place virtually immediately after the lockdown. And despite the limitations of the lockdown and measures surrounding the pandemic and the economic challenges Curaçao was facing even before the pandemic, several important milestones have been achieved.
Important steps have been taken once the roadmap for the year has been approved at the beginning of 2020. A committee has been set up to analyze the Foreign Exchange License, and several other committees have been set to work to address, among other things, the various changes needed to address the issues facing the international financial services industry. More specifically, this concerns the so-called “Substance” regulations which are set as the international standard. In this context, the international tax rules have been amended in recent years, which has a direct impact on the legislation and therefore on the sector in Curaçao. As a result of these changes, the service providers, including the trust offices, have to offer other types of work in addition to the existing activities, which are more integrated in the business organizations of their international clients and thus provide more added value to the business chain of their international clients. International banks and the gaming industry have also received the necessary attention in this respect.
Much has been done to share knowledge and build on existing and new networks. CIFA has also developed a new marketing strategy, which will be used as a guideline to market the financial sector abroad in 2021. The Tax Taskforce, in cooperation with various stakeholders, including the Ministry of Finance and the Central Bank of Curacao and St. Maarten, designed and supervised the transition from offshore legislation to a new internationally approved profit tax. Guidelines have been drawn up for the qualification of ‘Domestic Income’ in profit tax and an agreement has been reached for a decree to prevent double taxing. In addition, CIFA, as usual, regularly fulfilled its advisory role towards the government with regard to financial issues and financial tax and legal regulations.
CIFA calls for openness to change
“Only if we are really open to change and change our attitude will opportunities be realized,” says De Jesus. “In practice this means that we have to be open to the experiences of others and share as much knowledge as possible. Only then can we make the changes and knowledge our own and continue ‘on our own two feet’. Some specialist knowledge, for example, is simply not yet present on Curacao. We have to get this knowledge from outside and learn from it”. “And in those cases where this expertise does exist in the private sector, it is important that this expertise is brought together in a positive public-private partnership for the best possible end product for our country in general and our sector in particular”.
CIFA has formulated a total of 10 objectives for 2021, which can be achieved with this open attitude and approach:
- Drastically improve immigration regulations and procedures. In practice, this means that foreign specialists or investors will receive their permit within one week.
- Address changes needed in the Fund Sector
- Set up a Training & Accreditation Centre for the financial sector
- Address the challenges in the Gaming sector
- Finalize International Tax treaties.
- Continue to tackle the overall tax reform – which has already started in 2019 – in cooperation with stakeholders.
- Greater involvement with CIFA members.
- Roll out the marketing strategy to improve the position of the financial sector abroad
- Complete the plans of the “Substance” committee
- Implement the guidelines of the Innovation Box
In short, CIFA has an ambitious agenda for 2021! “We commit ourselves to continue to work hard and constructively for the recovery and growth of our economy”.
CIFA’s slogan for 2021 is “Open up for Change”. The board of CIFA, on behalf of CIFA, wishes the entire community of Curacao a healthy and successful year!
The CIFA Board consists of Nacha de Jesus, Roland Beunis, Bryan Irausquin, Giovanny Pieternelle, Tjarda Tazelaar, Julian Lopez Ramirez and Sueena Francisco.
CIFA would like to invite everyone to view the video message on the CIFA website: www.cifa-curacao.com. The video message provides more information about the achieved goals of CIFA and the planned goals for 2021.
For more information, press only:
PR Contact Name: Andreina Garcia
Phone number: +5999 5128212
Email: info@cifa-curacao.com
Website: www.cifa-curacao.com
Read More: CIFA Road Map
by g.solano@profoundprojects.comSummary Meeting Minister Martina
Dear Members,
On Monday July 13th 2020, CIFA attended a meeting with Minister Martina.
The main purpose of the meeting was to explain to the Minister the opportunities that we see within the financial sector and also what is needed in order to achieve it.
We presented him with a short summary of our roadmap in which we discussed CIFA’s strategic goals. Our roadmap was presented to our members during the general member’s meeting held on May 26th 2020.
Please find attached the one-pager that was presented to the minister with the most important topics to be discussed and worked on.
Topics were:
- Tax;
- Regulations & Permits;
- Deviezenregeling;
- Marketing & Data Collection;
- Product Development;
- Quality Improvement.
It is a fact that some of our most important topics discussed in our roadmap are very dependent on the government. For example tax, permits, law and regulation.
For this reason it is very important to maintain a good collaboration with the public sector.
The meeting went very well and it was agreed that we will meet regularly in order to keep focus on the points discussed and also to offer our help where needed.
Some of these subjects fall within the purview of other ministries, outside of the responsibility of the Ministry of Economic Development (“MEO”). But as they are still important to him from an broader economic development perspective, Minister Martina has proposed to hold follow-up meetings together with other ministries as well.
The first such follow-up meeting will be with the Ministry of Finance.
Besides these meetings CIFA will continue to have the tax committee meetings with the fiscal affairs department (SFZ) every two weeks working together on amongst others topics such as substance, guidelines and amendment profit tax, double taxation prevention decision, BRNC, etc.
We will continue to keep you informed about any developments regarding these regular meetings.
Please note that we are working on an information session for our members regarding substance.
Kind regards,
CIFA
by g.solano@profoundprojects.comNewsflash April 24,2020
Dear Members,
We hope that under the circumstances you and your family are doing well. By means of this Newsflash we would like to update you on the Tax Developments we have been working on, regarding COVID-19 actions and regarding the Annual General Member’s Meeting.
Tax developments
On January 31, 2020 we informed you that with the transition from offshore to onshore, a number of aspects became uncertain and therefore needs clarification or confirmation from the Sector Fiscal Affairs (SFZ). The tax committee consisting of representatives of CIFA, of the Tax Advisors Association (VAB), of the International Financial Group (IFG) and of Sector Tax Affairs (SFZ) has made an inventory of these matters and worked together on clarifying these matters. We are pleased to be able to present you attached with a joint letter from the Fiscal Tax Affairs and from the Tax Authorities in which these matters have been confirmed.
Furthermore, we are happy to inform you that our request for an extension for the period to convert onshore companies to Curacao Beleggings Vennootschap (CBV) or Transparante Vennootschap (TV) has also been granted and for both onshore and onshore companies this extension from March 31 to April 30th has been prolonged until the end of June 2020. Additionally they confirm that extra time has been granted to build up substance.
COVID developments
Immediately when the lockdown was implemented, CIFA contacted MEO to inquire on the possibilities for exemption on the lockdown for the financial sector (not only banks and insurance companies) but without success. As per today the government granted permission for some companies to restart their activities. That news triggered the board of CIFA to increase its lobby with the respective authorities trying to achieve a gradual exemption for some employees with the financial sector.
CIFA also reached out to the “noodfonds” committee and other organizations to offer our cooperation and support and to work together on the midterm solutions for the economy including the financial sector. In that respect we had a meeting with the Minister of Finance last week where we discussed the current “nood” measures (amongst others the uncertainty about the possibility to file a request for tax payment deferment for March).
We also discussed a proposal that the tax committee has submitted for a more formal collaboration with The Fiscal Affairs (SFZ) to work together on the midterm/long-term opportunities for the sector.
This week we have a meeting planned with the Central Bank of Curacao and Sint Maarten (CBCS) to discuss the consequences of COVID-19 for the financial sector (challenges and opportunities). Since the meeting with Mr. Jardim and Mrs. Matroos-Lasten that was planned on March 17th was cancelled due to the COVID-19 developments, we will also discuss the topic, “Deviezenregeling”.
Please do not hesitate to reach out to the CIFA board with any remarks or concerns that you wish to be addressed during the meetings with the abovementioned authorities.
General Member’s Meeting (ALV)
Since we are not able to hold a General Member’s Meeting, we take this opportunity to inform you that we are working on organizing a virtual General Member’s Meeting (ALV) instead. We aim to have this ALV in May. The CIFA board further intends to organize the planned members information sessions as webinar sessions instead. If interested, kindly send us topics of interest and inform us on whether you are able to participate (either with the organization or as a speaker).
Hope to have informed you accordingly.
Kind regards,
CIFA Board
by g.solano@profoundprojects.com2020 will be the year of reinvention according to CIFA 13 of January 2020
Last Friday, the members of the Curaçao International
Financial Services Association (CIFA) gathered at Omundo Restaurant with other notable
members of our society to ring in the new year. During its annual new year’s event, CIFA
members reflect on the past year and set goals for the current year. The association’s
chairperson, Mrs. Nacha de Jesus, announced 2020 to be the year in which the international
financial services sector will reinvent itself.
Shifting to a higher gear
The highlight of the evening was a moving speech and toast by CIFA chairperson Nacha de
Jesus. She started by thanking her guests for the support they have received throughout
2019 and stated that she welcomed the position of chairperson on CIFA’s board with open
arms. “It was one of my personal achievements in 2019 and a true honor. Thank you,” she
said. Her speech continued with highlighting some of the achievements made by the
international financial sector in 2019. Such as obtaining the largely compliant- status,
implementing a new, internationally accepted and competitive profit tax regime, deepening
existing relationships with partners and starting new collaborations as well as having all
important players in the international financial services sector pursue one and the same
goal. De Jesus also touched upon the economic importance of the financial services sector
by drawing a parallel between the contribution the refinery made to the island economy
and the offshore regime. Her speech concluded with an outline of the goals the organization
has set for 2020. “2020 is the year in which the international financial sector will reinvent
itself. Now that the offshore regime no longer exists, it is time for a reinvention,” she said.
The chairperson believes that an attractive investment climate can only be achieved by
readjusting the sector’s product portfolio and improving the client licensing process. “The
aim is to introduce innovative technological solutions to be able to compete regionally and
internationally. We need to form strategic alliances with local as well as regional players.
There is so much we can learn from other countries that are in the next stage of
development. By analyzing what worked and what didn’t, we are able to shift to a higher
gear much quicker and gain competitive advantage in the region. The first steps have
already been made in 2019 and the momentum has been building. Decisiveness and hard
work, while still remaining agile, will ensure that we reach a higher level of service this
year,” De Jesus continued.
The growth challenge for 2020
De speech by De Jesus was preceded by two opening speeches. The evening kicked off with
an opening speech by the Prime Minister Eugene Rhuggenaath where the political leader
complimented the international financial services sector on the island for achieving the
OECD largely compliant-status last year and thus remaining off the blacklist. The Prime
Minister was optimistic about the future of the sector and acknowledged the importance of
the sector for the local economy. “A consolidated financial sector represented by CIFA is the
best way for the international financial sector on the island to grow. The new tax regime is
another great step in the right direction,” he said. “Even though the various negative
forecasts may suggest otherwise, there is light at the end of the tunnel. The international
financial services sector together with the tourism sector remain solid pillars of the local
economy,” he continued. The Prime Minister finished his powerful speech by remarking that
by breaking the mold, the island will be able to turn the tide and put Curaçao back on the
map so that next year the annual new year’s event will be a celebration of growth.
Collaboration
The Prime Minister’s speech was followed by an equally positive speech by the Minister of
Finance Kenneth Gijsbertha. He stated: “We must, and we will, overcome the obstacles that
are currently in our way.” He reflected on the challenging year 2019 with the formal
instruction (aanwijzing) the Dutch Kingdom Council of Ministers gave to the government as
well as all the insecurities surrounding Refineria di Kòrsou (RDK) just to name a few.
“Surviving is not enough. We need to thrive. And the only way to achieve that is collectively
as one country,” he continued. The Minister of Finance finished his speech by expressing his
belief that together and in close collaboration with CIFA in its role as representative of an
important pillar of the economy, economic growth can be achieved and sustained.
The evening finished with a toast by De Jesus.