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Aruba: New Administrative Penalty Scheme for Late Tax Payment and for Payroll Reporting Failures

(Jan. 11, 2016) It was reported on December 31, 2016, that as of January 1, 2016, the tax administration of Aruba would inaugurate a new policy on administrative penalties for late payment of taxes. (René Offermanns, Aruba: 2016 Policy on Administrative Penalties Published, TAX NEWS SERVICE (Dec. 31, 2015), International Bureau of Fiscal Documentation online subscription database.)  The punishments for (partially) late payment of taxes, paid through a tax return, are:

  • for a first offense, 10% of the tax due, with a minimum payment of AWG125 (about US$70);
  • for a second offense, 10% of the tax due with a minimum payment of AWG250;
  • for third and subsequent offenses, 10% of the tax due with a minimum payment of AWG500 and a maximum AWG10,000. (Id.)

In the case of late payment of profit tax, the penalties for each offense category above are also 10% of the tax due, but with a minimum fine of AWG250 and maximum of AWG2,500 for a first offense; a minimum of AWG500 and maximum of AWG5,000 for a second offense; and a minimum of AWG1,000 and maximum of AWG10,000 for three or more offenses. (Id.)

Penalties have also been revised for the failure to keep payroll records or to report information on salaries paid to employees. In the case of the former, the penalty is a fine of up to AWB1,000; for the latter, the penalty is up to AWG10,000.  (Id.)

If a company reports late or fails to report information on payments made to third parties not in its employ, the administrative penalties are now, for late reporting, AWG400 if up to 10 such third parties are involved; AWG600, for 11-50 persons; AWG800, for 51-100 persons; and AWG1,000, for more than 100 persons. The penalty for failure of reporting in connection with each of these categories of number of persons involved is AWG1,000, AWG2,000, AWG5,000, and AWG10,000, respectively.  (Id.)