Curaçao Innovation Box
Digital service companies in Curaçao are taking advantage of the opportunities available to them in order to fuel their creative drive and harness the potential of the region. By developing their next big tech hit, these companies benefit from a 0% profit tax rate on qualifying income.
Under the Innovation Box regime, income derived from intellectual property (IP) in Curaçao may be eligible for a reduced profit tax rate of 0%. This reduced rate applies when the income is generated from intangible assets that undergo research and development (R&D) in Curaçao, or when the intangible assets are developed for Curaçao tax-resident companies by a foreign, unaffiliated enterprise. If the development is outsourced, the taxpayer must demonstrate their capability to direct the R&D based on their own expertise.
Taxpayers can request a reduced effective tax rate of 0% for qualifying income from qualifying intangible assets when submitting their profit tax return. Qualifying intangible assets include copyrighted software, intangible assets with a supplementary protection certificate, and intangible assets with a registered utility model designed to protect innovation.
What are the steps to take to register a Curaçao Innovation Box?
To register a Curaçao Innovation Box, you need to follow these steps:
1. Determine eligibility: Ensure that your company meets the eligibility criteria for benefiting from the Curaçao Innovation Box. The criteria may include innovation-driven activities, intellectual property rights, and substantial activity in Curaçao.
There is also a possibility for “small taxpayers” to qualify if the IP is non-obvious, useful, and novel. However, certain limitations apply.
To be classified as a small taxpayer, the following conditions must be met:
- The total sum of benefits received from intangible R&D assets in the current financial year and the preceding four years, along with the corresponding expenses incurred, should not exceed ANG 75 million.
- The taxpayer’s total net turnover, as reflected in the (consolidated) financial statements of the current financial year and the preceding four financial years, must not exceed ANG 500 million.