THE HAGUE--Double taxation of goods destined for St. Eustatius and Saba should not be a problem if St. Maarten companies make proper use of the tax exemptions that are in place for basic necessities, and if the exported goods remain under US $500.
Dutch Minister of Home Affairs and Kingdom Relations Ronald Plasterk stated in a letter to the Second Chamber of the Dutch Parliament on Wednesday that the export exemption of the Turn-over Tax provides sufficient room for St. Maarten companies to claim exemption in the majority of cases.
However, the private sector needs to be aware of the workings of the export exemption. There is a role for St. Maarten’s Minister of Finance to provide clarity on this and to intensify communication with the private sector on this issue, Plasterk stated.
“This is not only in the interest of the entrepreneurs and residents of St. Eustatius and Saba, but also improves St. Maarten’s tax system,” stated the Minister, and added that entrepreneurs in St. Eustatius and Saba could also play a more active role.
“Pressure can be increased on the St. Maarten companies and better purchasing conditions can be realised through more cooperation, including the applying and calculating of the (export) exemption in the purchasing prices.”
Ever since St. Eustatius and Saba attained the status of public entity of the Netherlands, there has been a discussion on the double taxation of goods destined for the islands. St. Maarten has the Turn-over Tax BBO in place, whereas in St. Eustatius and Saba the general consumption tax ABB is levied. In practice this means that double taxes are paid on goods that are imported via St. Maarten.
A quick study has been carried out into the circumstances of double taxation on the request of St. Maarten’s Finance Minister with the approval of the Dutch Ministries of Home Affairs and Kingdom Relations and of Finance. The study served to provide clarity on this long-time discussion between St. Maarten and the Netherlands.
The most important conclusion of this study was that only in a limited number of cases accumulation of the BBO and ABB could take place. In the majority of cases, goods destined for St. Eustatius and Saba are not taxable and there is a tax exemption in place for basic necessities and goods that are clearly marked for export.
Double taxation can only occur in case Statia and Saba entrepreneurs or residents purchase goods other than basic necessities at a St. Maarten company that doesn’t claim the export exemption, and also when the value of the goods exceed the US $500 travellers’ exemption.
Minister Plasterk did state that concrete examples showed that there was a discrepancy between legislation, policy and practice. Hence the role that the St. Maarten Government can play to provide clarity.
