High-level checklist in relation to the Curaçao innovation box
February 9, 2022
Additional rules were published on R&D-declarations, which should allow the Bureau of Telecommunication & Post (“BTP”) to issue R&D-declarations to taxpayers with research and development activities in Curaçao. Subsequently, taxpayers can apply the innovation box regime for Curaçao profit tax purposes if conditions are met. Income allocable to the innovation box is taxed at 0% profit tax. Our Tax Instant News on this development can be found here.
Below we included a high-level checklist that can be used to conduct a preliminary internal assessment to review if your company is eligible to obtain an R&D-declaration and, if obtained, can apply the innovation box regime for profit tax purposes in their annual profit tax return.
- Does your company conduct research and development projects?
- Are these projects aimed at technical-scientific research or development of technical new assets, manufacturing processes or software?
- Do these projects result in intangible assets that are used for the companies own risk and account?
- Are the projects within your company conducted in Curaçao for the risk and account of a Curaçao taxpayer?
- Do the projects result in intangibles assets (e.g. patents, software, trademarks, etc.) that are used in products sold or services provided?
- Has the project been completed after 1 July 2018 or is the project still being conducted?
- In case you qualify as a large company (i.e. 5-year profit in relation to intangible assets exceeds NAf 75 million in total and 5-year (consolidated) net-revenue exceeds NAf 500 million in total), is the IP registered as patent, trademark or similar right?
If the answer to all of the above questions is ‘yes’ (insofar applicable), it is recommended to review in more detail if an R&D-declaration can be obtained and if application for the innovation box regime for profit tax purposes is a possibility for your company.
As the published rules have retroactive effect to July 1, 2018, it may still be possible to apply the innovation box as of 2018 when final tax assessments for 2018 and following years have not been issued yet or objections can still be lodged.
Please note that the application for a R&D-declaration should be submitted within 3 months after a project is completed. In case the project was completed between July 1, 2018 and February 4, 2022, applications should be submitted before August 6, 2022.
We are available to discuss the potential application of the innovation box and any questions you may have. Please feel free to reach out.