In Bonaire, Expenditure Tax (ABB) is the principal indirect tax and is levied on the supply of goods by manufacturers who produce goods, delivery of services by entrepreneurs and importation of goods.
A manufacturer for Expenditure Tax purposes is any entrepreneur who produces goods using raw materials or semi-finished products. Manufacturers selling goods from a retail establishment intended to be used mainly for the sale of goods to others than entrepreneurs (retail), are not subject to the Expenditure Tax on goods. For the last-mentioned manufacturers, the Expenditure Tax is assumed to be paid at import. The general tax rate of the Expenditure Tax on the supply of goods is 8%. The tax rate of the Expenditure Tax for the rendering of services is 6%. Some special rates apply for specific goods and services. Some exemptions also apply for specific supplies of goods and services.
Who (taxable person)
For the Expenditure Tax a taxable person can either be an entrepreneur who supplies services and an entrepreneur who is also a manufacturer who produces goods and supplies own produced goods. An entrepreneur is defined in article 6.8 BES Tax Act among other as "any person who independently conducts a business or profession". As stated in article 6.1 paragraph b, an entrepreneur is a manufacturer “… insofar as he does not carry out the supply of the goods produced by him from an establishment which is largely equipped, intended and used for the sale of those goods to persons other than entrepreneurs”.
What (taxable transaction)
The VAT consists of the following taxable events:
• The supply of a goods produced by manufacturers.
• The supply of services by entrepreneurs.
• The importation of goods.
Where (place of supply)
In Bonaire a reverse charge mechanism is applied for non-residents supplying goods and services to taxable persons in Bonaire.
Right of deduction
Manufacturers have the right to deduct the Expenditure Tax paid at the moment of import and the Expenditure Tax paid to other manufacturers (as to raw materials, ancillary materials or semi-finished products).
Construction sector
Previously the (sub)contractor providing construction services would generally not be able to deduct Expenditure Tax paid: the (sub)contractor renders a service for which the right of deduction does not apply.
Based on the Decree of the State Secretary of Finance of September 23, 2011:
Entrepreneurs in the construction sector are (also) regarded as manufacturer if they carry out actual construction work on behalf of a client, if real estate is constructed. The result is that Expenditure Tax is due on the received contract sum by the contractor. The contractor will also be entitled to deduct the Expenditure Tax paid for the material used to construct.
A requirement for the deduction is that the 8% Expenditure Tax will be applied on the invoice for the services performed (and not 6%).
Expenditure Tax on import
Expenditure Tax is due on the import of goods in the BES-islands. The Expenditure Tax is due on the customs value. The customs value includes taxes, levies and dues, except the Expenditure Tax itself.
In Bonaire the Expenditure Tax on import is 8%, certain specific goods such as 25% for cars with CO-2 emissions and 0% for cars without CO-2 emissions. The rates in Saba and Sint Eustatius can be different.
Exemptions
the ABB has exemptions on certain imported goods. For example:
• The import of first life necessities.
• Various medical services.
Exempt services as for example:
• Non-commercial education.
• Public transport, including school bus services.
Not applicable. However, upon request, entrepreneurs may be exempt from Expenditure Tax provided that the turnover in the preceding year is less than 20,000 US dollars (USD). This applies only if certain conditions are met and differs for private persons and legal entities.
Not applciable.
Yes. The place of a service provided by a non-resident entrepreneur to a consumer (B2C service) is the place where the customer is established or has his domicile or usual residence. If this consumer resides in Bonaire, the Expenditure Tax is due by the non-resident entrepreneur in Bonaire.
The above is applicable for the following services:
a. Telecommunication services.
b. Radio and television broadcasting services.
c. Electronic services.
No.
In principle the Expenditure Tax returns should be filed on a monthly basis, within 15 days of the calendar month following the return period in which the Expenditure Tax is due. However, upon request the return can be also filed quarterly or yearly.
A penalty may be imposed by the tax authority if the Expenditure Tax returns are not submitted on time (maximum USD 1,400), or the related tax is not (fully) paid by the due date (maximum USD 5,600).
No other declarations or returns are required in relation to the Expenditure Tax in Bonaire.
A penalty can also be imposed by the tax authorities due to the gross negligence of the taxpayer. The penalty can amount to a maximum of 100% of the tax due.
No. Right to deduct Expenditure Tax is only applicable to manufacturers who produce their own goods for supply.
Issuing of invoice
The obligation to issue an invoice applies only to an entrepreneur considered a manufacturer for Expenditure Tax purposes. An entrepreneur but not a manufacturer, are not required to issue invoices. Manufacturers are only required to issue an invoice at the request of the purchasing entrepreneur. They must, in principle, issue the invoice within fifteen days following the month in which the delivery took place. Manufacturers must issue an invoice and are required to create and keep an extract/copy of the invoice.
Invoice requirements
The invoice must list the following details:
• The day on which the delivery takes place.
• The name and address of the manufacturer and his customer.
• The crib number of the manufacturer.
• An ongoing invoice number and a date.
• A description and the quantity of the delivered goods.
• The fee and the Expenditure Tax amount.
There are no current or anticipated Standard Audit File for Tax (SAF-T) or similar electronic/digital filing requirements.
For further information on indirect tax in Bonaire please contact:
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Hans Ruiter |
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Indirect tax snapshot
