Trouw | Curacao abolished tax for shell companies

Secretly introduced tax law changes means that shell companies, mostly offshore Ez-one online gaming companies, established in Curaçao no longer have to pay tax since January 1, 2020.

Lobby – Foreign companies on Curacao do not have to pay any profit on Curacao. The law that makes that possible has been rummaged through parliament.

Shell companies no longer pay profit tax on Curaçao since 1 January 2020. At the end of 2019, after a hasty and messy procedure, the Curaçao government passed a package of new tax laws that abolished the profit tax for ‘foreign companies’.

MEPs didn’t realize what they were agreeing to and the new tax rules have so far gone unnoticed in the media. The tax laws are relevant to the Netherlands because Curaçao was in danger of going bankrupt during the corona crisis and the Netherlands had to help with loans of more than 400 million euros.

The legislative changes came about after strong lobbying from the Curaçao financial sector. The companies threatened to leave Curaçao at the end of 2019 if the profit tax was not adjusted quickly, according to documents in the hands of Platform Investico. The finance minister then asked parliament to approve the laws before they were officially discussed in parliament, so that an exodus of companies could be prevented.

Some MPs protested that they had too little information to make a good decision. For example, there was no explanatory memorandum and no report yet from the Advisory Council, an official body that is required to provide advice on new legislation. “How can we argue about something we haven’t been given an explanation about? That is undemocratic,” said Member of Parliament Marilyn Moses at the time. “We had absolutely no insight into what we were voting on,” says a parliamentarian who voted in favor at the time. “I did not realize at all that it was about abolishing tax for foreign companies.” The Curaçao parliament did not discuss the question of whether it is desirable to abolish the tax for foreign companies.

“We had absolutely no insight into what we were voting on”

The Curaçao Advisory Council disapproves of the law, according to the advisory report in the hands of Investico, which was only sent to parliament after the law was approved. The Council also protests that it was given too little time to assess the laws, and urges the government ‘in the light of guaranteeing the quality of legislation and regulations, to follow the correct procedures in the future’. The Curaçao Social and Economic Council is also very critical. The Minister of Finance assumes that the amendments to the law will have no effect on tax revenues, but the SER considers this assumption to be unjustified.

E-zone control

Curaçao had to change its tax laws in 2019 because the country threatened to be placed on the European blacklist of tax havens in 2020. The stumbling block was, among other things, the e-zone scheme: a scheme whereby companies located in special economic zones pay only two percent profit tax.

This arrangement was abolished under pressure from the European Union at the end of 2019, and Curaçao was thus able to avoid being placed on the blacklist. But at the same time it was decided that Curaçao companies that earn their income abroad now no longer have to pay profit tax at all, unless that profit comes from dividends, interest or royalties. The Curaçao Ministry of Finance does not answer questions about the amendment of the law.

The abolition of tax for foreign companies is also important for the Netherlands. When corona broke out in 2020, Curaçao threatened to go bankrupt because the economy and public finances were in bad shape. The Netherlands assisted with loans of more than 400 million euros. In return, it was agreed that Curaçao would improve tax laws and government finances.

Here you will find the corresponding documents for this research.

Bron: Trouw

Note by Nardy

The context of the above article can be found in the following series of articles and podcasts by platforum for investigative journalism Investico, weekly magazine De Groene Amsterdammer and radio broadcaststation Argos (VPRO-Human):

  1. Explainer VPRO-Human (video): ‘Hoe Curacao een gokstaat werd’ (link: https://www.vpro.nl/argos/media/luister/argos-radio/onderwerpen/2022/Curacaos-roulette.html)
  2. Investico: Roulette met de Rechtsstaat https://www.platform-investico.nl/artikel/roulette-met-de-rechtsstaat-geannoteerd-verhaal/
  3. Investico: Hier vindt u de documenten over de Curacaose online goksector https://www.platform-investico.nl/artikel/vind-hier-de-documenten-over-de-curacaose-online-goksector/
  4. Investico: Roulette of Law (English version) https://www.platform-investico.nl/artikel/roulette-of-law-annotated-version/
  5. Investico: Russische, Oekrainse en Belarussische owners behind Curacao online casino’s https://www.platform-investico.nl/artikel/russische-oekraiense-en-belarussische-eigenaren-achter-curacaose-online-casinos/
  6. Investico: Curacao abolished tax for shell companies https://www.platform-investico.nl/artikel/curacao-schafte-belasting-voor-brievenbusbedrijven-af/
  7. Trouw (frontpage): Curacao loopt belasting mis door snelle wet (PDF)
  8. De Groene Amsterdammer: Roulette met de rechtstaat (PDF) and https://www.groene.nl/artikel/roulette-met-de-rechtsstaat
  9. Podcast Argos/Investico: https://www.platform-investico.nl/artikel/online-casinos-de-perfecte-witwasmachines/
  10. Podcast Argos/Investico Speurwerk on Spotify: https://open.spotify.com/show/7lKTVx35ZTkcepXCAHkaZ1
  11. Podcast Argos on NPO Radio 1: Curaçaos roulette https://www.nporadio1.nl/fragmenten/argos/3adc60b4-16b7-4fae-9318-d4d9bf12cce6/2022-05-28-curacaos-roulette
  12. Podcast VPRO: https://www.vpro.nl/argos/media/luister/argos-radio/onderwerpen/2022/Curacaos-roulette.html
  13. VPRO – Human: In het land van de online casino’s controleert de goksector zichzelf
  14. VPRO – Human: Curaçaose online casino’s blijken bezit van Russische eigenaren
  15. Podcast Argos on Spotify: https://open.spotify.com/episode/2y6Nc4fNKlabM9ZSlCRC7h

Note by Nardy

The context of the above article can be found in the following series of articles and podcasts by platforum for investigative journalism Investico, weekly magazine De Groene Amsterdammer and radio broadcast station Argos (VPRO-Human):

  1. Explainer VPRO-Human (video): ‘Hoe Curacao een gokstaat werd’ (link: https://www.vpro.nl/argos/media/luister/argos-radio/onderwerpen/2022/Curacaos-roulette.html)
  2. Investico: Roulette met de Rechtsstaat https://www.platform-investico.nl/artikel/roulette-met-de-rechtsstaat-geannoteerd-verhaal/
  3. Investico: Hier vindt u de documenten over de Curacaose online goksector https://www.platform-investico.nl/artikel/vind-hier-de-documenten-over-de-curacaose-online-goksector/
  4. Investico: Roulette of Law (English version) https://www.platform-investico.nl/artikel/roulette-of-law-annotated-version/
  5. Investico: Russische, Oekrainse en Belarussische owners behind Curacao online casino’s https://www.platform-investico.nl/artikel/russische-oekraiense-en-belarussische-eigenaren-achter-curacaose-online-casinos/
  6. Investico: Curacao abolished tax for shell companies https://www.platform-investico.nl/artikel/curacao-schafte-belasting-voor-brievenbusbedrijven-af/
  7. Trouw (frontpage): Curacao loopt belasting mis door snelle wet (PDF)
  8. De Groene Amsterdammer: Roulette met de rechtstaat (PDF) and https://www.groene.nl/artikel/roulette-met-de-rechtsstaat
  9. Podcast Argos/Investico: https://www.platform-investico.nl/artikel/online-casinos-de-perfecte-witwasmachines/
  10. Podcast Argos/Investico Speurwerk on Spotify: https://open.spotify.com/show/7lKTVx35ZTkcepXCAHkaZ1
  11. Podcast Argos on NPO Radio 1: Curaçaos roulette https://www.nporadio1.nl/fragmenten/argos/3adc60b4-16b7-4fae-9318-d4d9bf12cce6/2022-05-28-curacaos-roulette
  12. Podcast VPRO: https://www.vpro.nl/argos/media/luister/argos-radio/onderwerpen/2022/Curacaos-roulette.html
  13. VPRO – Human: In het land van de online casino’s controleert de goksector zichzelf
  14. VPRO – Human: Curaçaose online casino’s blijken bezit van Russische eigenaren
  15. Podcast Argos on Spotify: https://open.spotify.com/episode/2y6Nc4fNKlabM9ZSlCRC7h
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