Tax & Accounting Blog

Dissolution of the Netherlands Antilles

Indirect Tax, Transaction Tax October 16, 2010

Last Sunday, the world welcomed two new countries: St. Maarten and Curacao. As of 10 October 2010 and after five years of legal proceedings these islands have become independent countries within the Kingdom of the Netherlands.

The Netherlands Antilles was an autonomous country within the Kingdom of the Netherlands. However, last week it was officially announced its dissolution. This changes the political, economical and financial relationships between the Caribbean islands and the Netherlands. One of the most important changes is the implementation of a new tax system which will introduce a new transaction tax for the BES islands (Bonaire, Saint Eustace and Saba). The existing Dutch-Antillean tax system will continue for the period between 10 October 2010 and 1 January 2011. The Dutch Prime Ministry has expressed, the intention is for this temporary transitional measure to be replaced by the new tax system for the BES islands on 1 January 2011. The BES islands have now the status of public entities.

Among the financial changes, the Dutch Lower House of Parliament has agreed on the introduction of the dollar on Bonaire, Saint Eustace and Saba. This means that on 1 January 2011, the Antillean guilder will be replaced by the American dollar. On January 2011, all bank balances will be automatically converted into dollars. The conversion rate used will be the fixed rate used between the Antillean guilder and the dollar since 1971.