ARUBA – Wage Subsidy adjustments and the definition of turnover explained

ARUBA – Wage Subsidy adjustments and the definition of turnover explained

October 3, 2022

Recently the Common Court of Justice (“CCoJ”) ruled on the definition of turnover for the calculation of the amount of Wage Subsidy, siding with the taxpayer that for the calculation of the loss in turnover not only taxable turnover needs to be taken into account, but also loss in exempt turnover.

In March 2020 the Government of Aruba introduced and paid a (monthly) wage subsidy to vulnerable local companies that were impacted by the COVID-19 pandemic. In order to receive the wage subsidy companies had to prove the loss of turnover in any month compared with the turnover in the same month pre-COVID amounted to at least 25%.

The payments made were considered to be advances on the wage subsidy the company would be entitled to after the Sociale Verzekeringsbank (“SVb”) would have audited the requests The determination of the loss in turnover is made subsequently based on the actual decrease in business turnover in comparison with the business turnover as defined in article 1 of the National Ordinance BBO. If the calculations were wrong, recovery measures are in place to reclaim the advanced payout.

In this, and many other cases, SVb, decided to partially reclaim the advanced payout subsidy, and calculated the loss of turnover based on the taxable turnover- according to the company’s filed BBO/ BAVP/ BAZV return in both periods- ignoring the exempt turnover. For example, hotels, are subject to Tourist Levy (which is not included in the tax return forms). Since the exempt turnover was not filed in the tax return form, the SVb additionally argued that the company did not comply with its legal obligation to declare the total business turnover (taxed and untaxed) in the BBO/ BAVP/ BAZV return.

CCoJ has indicated that the definition of turnover in the wage subsidy regulations is based on article 1 of the National Ordinance BBO and not on the taxable turnover in the tax return. This article defines turnover as any remuneration received for the delivery of goods and services, and thus includes exempt turnover. To determine if a company has a decrease of at least 25% of the business turnover, the total (taxed and exempt) turnover must be taken into consideration. In addition, the national ordinance Wage Subsidy does state that the company must comply with another requirement, which is complying with its legal obligation to file the correct BBO/ BAVP/ BAZV return. In this case, CCoJ stated that technically the company did not comply with its legal obligation, however, the omission was not material, and the return was not purposely filed wrong. Furthermore, the omission did not influence the amount of tax levied and thus the company could be considered to have complied with its legal obligation to file a correct return and to have paid the amount of tax due.

Have you received a final demand and notice reclaiming the advanced wage subsidy received from the SVb, contact us for more information and we can help you avoid further recovery measures and costs.


In case you wish to receive further information or discuss your tax position, kindly contact one of our tax advisors.

Wendell Meriaan
+(297) 588 6060

Jorik Julsing
+(297) 588 6060

Indrah Maduro
+(297) 588 6060


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