Remarkable fiscal changes in the Caribbean Netherlands

Increase of the tax-free basic allowance

From January 1, 2023, the tax-free amount is significantly higher than in previous years, at USD 17,352 per year. This is an increase of USD 5,154 from the 2022 tax-free amount, which was USD 12,198.

In other words – no wage tax is due on the first USD 1,446 salary per month. However, the employer’s contribution in the Employee and Medical Insurances premiums are due on this amount. This means that up to a salary of USD 1,446 gross per month, the net salary will amount to the same amount as the gross if the tax-free allowance is applied.

This tax-free sum may be applied when calculating wage tax, which tax includes the employee’s contribution to the premiums for AOV, AWW, and medical insurance. The tax-free amount means that part of the taxable income is not taxed. This is of course automatically applied correctly in Celery.

Increase of the ‘Regular wage regulation’ in the Caribbean Netherlands

The Regular wage regulation applies to a director who has a substantial interest in an entity and who also performs work for that entity. The Regular wage regulation means that a holder of a substantial interest in an entity is deemed to receive a wage that is normal for the level and duration of his work.

As of 2023, the standard amount for applying the Regular wage regulation is adjusted and increased from USD 14,000 to USD 25,000 per year. An increase of more than 78%.

If the wage actually received by the holder of a substantial interest is lower than the Regular wage, the difference is nevertheless deemed to have been received. This difference is called the notional wage. This notional wage has not actually been paid but is deemed to have been received by the holder of a substantial interest for the purpose of deduction and payment of the wage tax.

If the wage actually received is higher than the Regular wage, this will not lead to a deduction or reduction. In this situation, the actual wages paid are the starting point for taxation.