Aruba’s proposed Afl. 10,000 reduction of taxable income for 65+ workers

January 5, 2026

The Government of Aruba is currently preparing an important amendment of the income tax law to introduce an annual AWG 10,000 reduction of the taxable income for taxpayers aged 65 and over who remain active in the Aruban labor market. The initiative has been approved by the Council of Ministers and will proceed to Parliament for debate and formal enactment. The legislation aims to improve after tax earnings for retirees and to make post-retirement work more attractive in order to help employers address structural vacancies across sectors.

Policy background
Employers in healthcare, hospitality, logistics and professional services report persistent shortages in staffing. Government research has shown that many retirees wish to continue contributing, but that the additional earnings can push them into higher tax bands and dilute net pay, making work after retirement less attractive. The proposed reduction of Income Tax is designed to improve the net return on work beyond retirement.

How the relief would operate
The proposal of the Government has described AWG 10,000 to be a reduction of income for Income tax purposes tax for eligible seniors who work in Aruba alongside receiving a pension. Final mechanics will be set in the formal bill to be sent to parliament but is described as an additional deduction from taxable income. The tax benefit would then be calculated as the top tax rate applicable to the taxpayer × AWG 10,000.

Under the 2025 tax table (tax-free amount AWG 30,000; top marginal rate 52% above AWG 135,527), indicative savings would be about AWG 5,200 at 52%, AWG 4,200 at 42% and AWG 2,100 at 21%.

Legislative pathway and timing
The proposal proceeds through Parliament and becomes operative only after approval and publication in the Official Gazette. If enacted mid-year, transitional guidance on timing and any proration may possible be expected.

Our advisors would be pleased to discuss the implications and opportunities this proposal may include for your organization. Please do not hesitate to contact any of our specialists below.