Dear Client,
Last week the Parliament of Aruba passed the State Ordinance for the so-called ‘health levy’ (official name in Dutch: ‘Bestemmingsheffing Algemene Ziektekosten Verzekering AZV’). Earlier this year the Government of Aruba (‘GOA’) held a social dialogue on the topic of the general health insurance. The social dialogue was mainly aimed at alternatives to strengthen and secure the general health insurance system. As part of the social dialogue most social partners agreed to introduce a health levy.
On Friday, November 28, 2014 the State Ordinance of the so called ‘health levy’ was proclaimed via the ‘Afkondigingsblad’ in order to enter into force on Monday, December 1, 2014.
The health levy shows many similarities with the turnover tax (BBO), except that the revenue collected will not be destined for the general funds of the GOA, but the revenue will be deposited on a monthly basis by the tax authorities into the general health insurance fund (AZV).
The rate of the health levy is 1%. Contrary to the BBO, the health levy of 1% must be explicitly stated on the invoice for each sales transaction.
What does this mean for the free zone?
Just like the State Ordinance BBO, companies who are admitted to the free zone based on State Ordinance Free Zones are exempt from payment of the health levy as long as the transaction is related to turnovers generated from export of goods and services. Sales to the local market are subject to the health levy (and BBO).
The turnovers generated by FZA, such as rental income and the Freezone Facility Charge (FFC), are subject to the health levy and BBO.
Rent
As of January 1, 2015, FZA will charge 1% health levy on the monthly rent of the warehouses and offices. The related levy fee for the rent of the warehouses for the month of December will be for our account. Further information will be provided through a separate email.
Freezone Facility Charge (FFC)
However, as of December 1st, 2014, FZA will have to charge 1% health levy on the monthly FFC.
Please be informed that the FFC declaration form and instructions will be amended as soon as possible to incorporate the health levy.
For more information you can download the following documents:
Sincerely,
G.M. Peterson
Managing Director