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1 December 2014

Health tax

As of 1 December 2014 the health tax (in Dutch: bestemmingsheffing AZV) entered into force. All
income received with regard to the health tax (hereinafter: BAZV) will go to the Aruba General Health
Insurance Fund (AZV) to strengthen its funding. Hence the name health tax.

To whom does the BAZV apply?

Subject to the BAZV are entrepreneurs whom in the course of their business supply goods or render
services in Aruba who are currently subject to the Aruba turnover tax (hereinafter: BBO). Every
entrepreneur that delivers goods and/or renders services in Aruba as of 1 December 2014 has to pay
BAZV to the Aruba Tax Authorities on the compensation received for the goods delivered and the
services rendered.

Compensation subject to the BAZV

The entrepreneur has to pay BAZV on the total compensation received with regard to the delivery of
goods and/or the rendering of services. If the received compensation is less than the fair market value
of the delivery or service, the compensation will be corrected to the fair market value.

What is the percentage of the BAZV?

The BAZV rate is 1%. As mentioned, this percentage will be levied on the received compensation. On
this compensation the entrepreneur also has to pay 1.5% BBO to the Aruba Tax Authorities. As a
result, the entrepreneur has to pay a total of 2.5% of BAZV and BBO on the received compensation.


The BAZV is calculated on the compensation. Similar as with

the BBO the compensation is all that is received for the supply
of goods or the rendering of services. In line with the rulings of
20 January 2010 of the Tax Court of Appeal the amount of
taxes due depends on whether the taxes are charged to the
client or not. If the taxes are charged to the client the taxes
are regarded as part of the compensation. The amount of tax
to be remitted is then calculated on the compensation
including the taxes. If the taxes are absorbed by the
entrepreneur the taxes are calculated on the net
compensation, excluding the taxes. Below are two simple
examples to illustrate the difference.

Example 1
BBO and BAZV are charged to the client
(excluding taxes)

The BAZV due has to be mentioned on the invoice.


Deliveries and services that are exempt for BBO purposes are
also exempted for the BAZV. For example, a medical doctor
renders exempt services for both the BBO and the BAZV.

Remittance by way of return

Entrepreneurs have to pay the BAZV monthly to the Aruba Tax

Authorities. The BAZV due in a certain month has to be paid at
the latest on the 15th of the next month to the Aruba Tax
Authorities. According to a publication of the Aruba Tax
Authorities, entrepreneurs are required to use the BBO tax
returns to report and remit the BAZV. The Aruba Tax Authorities
will not issue separate tax returns for the BAZV.

Afl. 1,000.00

Fiscal Unity

BBO (1.5%)

Afl. 15.00

BAZV (1%)

Afl. 10.00

Total compensation

BAZV on invoice

Afl. 1,025.00

Entrepreneurs can request a fiscal unity for BAZV purposes

under the same conditions as for BBO purposes. In this way there
would be neither BBO nor BAZV due with regard to transactions
between companies in the fiscal unity. According to a publication
of the Aruba Tax Authorities if a fiscal unity already exists for
BBO purposes it is not necessary to submit a separate request
for a fiscal unity for BAZV purposes.

Cash basis or accrual basis

BBO to be remitted (1.5%)

Afl 15.37

BAZV to be remitted (1%)

Afl 10.25

Total taxes due

Afl 25.62

The BAZV is due upon receipt, the so-called cash basis. Upon a
written request of the entrepreneur the Tax Inspector can
approve that the accrual system is used. In that case the BAZV
becomes due when the invoice for the delivery or service is
issued. In case the entrepreneur already has an approval from
the Tax Inspector to use the accrual system for BBO purposes,
no separate request is required for BAZV purposes.

Example 2
BBO and BAZV are absorbed
(including taxes)

Total compensation

Afl. 1,000.00

Afl 1,000.00

BBO to be remitted (1.5%)

Afl 15.00

BAZV to be remitted (1%)

Afl 10.00

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Transitional provisions

The Aruba Tax Authorities issued the following transitional

no BAZV is due on deliveries and services provided before 1
December 2014 for which payment is received after 1
December 2014;
no BAZV is due on deliveries and services provided after 1
December 2014 for which payment is received before 1
December 2014.


EY refers to the global organization, and may refer to one or

more, of the member firms of Ernst & Young Global Limited,
each of which is a separate legal entity. Ernst & Young Global
Limited, a UK company limited by guarantee, does not
provide services to clients. For more information about our
organization, please visit

2014 EYGM Limited.

All Rights Reserved.

The most important changes for you as an entrepreneur as a

result of the introduction of the BAZV are the following:
the total percentage due on the received compensation with
regard to deliveries and/or services. Besides 1.5% BBO, now
also 1% BAZV is due;
the BAZV should be mentioned on all invoices;
in addition to the BBO, BAZV will also be due monthly.
It should be noted that this information is of a general nature
only and should not be regarded as an advice in respect of any
specific transaction. Should you have any questions and/or
comments regarding the above or should you require more
information on the implications in your specific case, please do
not hesitate to contact one of our tax advisers.

Our tax advisers:

Luenne Gomez-Pieters
+297- 521 4444
Mireille De Miranda
+297- 521 4445
Roderick Ras
+297- 521 4443
Jaydee Perez
+297- 521 4442

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