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Aruba Parliament Approves First Phase of Fiscal Reform Plan Including Individual Income Tax and Ground Tax Changes — Orbitax Tax News & Alerts

On 20 December 2018, Aruba’s parliament reportedly approved the legislation for the implementation of the first phase of Aruba’s fiscal reform plans. This includes a reduction in the number of individual income tax brackets from 14 to 5 as follows, considering a tax-free amount of AWG 27,751:

  • up to AWG 27,751 – 0%
  • over AWG 27,751 up to 61,338 – 14%
  • over AWG 61,338 up to 91,120 - 25%
  • over AWG 91,120 up to 169,534 – 42%
  • over AWG 169,534 – 52%

The first phase also includes the introduction of a new rate structure for ground (property) tax that replaces the 0.4% flat rate, as well as the elimination of the general AWF 60,000 tax-free amount. The rates are as follows for resident owners of non-commercial property:

  • Property value up to AWG 120,000 – 0%
  • Property value over AWG 120,000 up to 250,000 – 0.2%
  • Property value over AWG 250,000 up to 500,000 – 0.3%
  • Property value over AWG 500,000 up to 750,000 – 0.4%
  • Property value over AWG 750,000 – 0.6%

For commercial property and non-resident owners of any property, a flat 0.6% ground tax rate applies.

The changes apply from 1 January 2019.