Monday, January 23, 2012

Is there a sales tax in Aruba at restaurants?

Yes. You can see an example on a restaurant menu here (BBO Tax (SalesTax) or here (bottom of page).

Turn over Tax
The Turn Over Tax called "Belasting op Bedrijfsomzetten" (BBO) or Business Turnover Tax is an indirect tax, introduced as of January 2007. BBO is levied of the operating revenues realized by entrepeneurs within the framework of their business or profession by the supply of goods and rendering of services in Aruba. The general BBO rate amounts to 1.5%. A reduced rate of 1% is applicable for that part of the operating revenues that has been realized by the export of goods. Furthermore, certain exemptions are applicable. Most of the exemptions are connected with the medical sector, education, tourism and avoiding double taxation.

BBO Tax (SalesTax)
"...A surcharge of 3% is added to all your purchases made on Aruba. It is either included in your pricing or is added as a surcharge to your final purchase amount....Since the first of January 2010 the BBO has been reduced to 1.5%. So a surcharge of 1.5% is added to all your purchases made in Aruba."

Turnover Tax

Subject to turnover tax (“belasting op bedrijfsomzetten”), hereinafter: BBO, are entrepreneurs that in the course of their enterprise supply goods or render services in Aruba. The taxable base consists of all remunerations (in cash or in kind) received by the entrepreneur for the supply of goods or the rendering of services. The rate is, as per January 1, 2010, set on 1.5% (before: 3%).

Transitional regulation regarding rate change

As per January 1, 2010, the rate has been decreased from 3% to 1.5%. For entrepreneurs using an invoice/accrual based system for the BBO, the BBO is due on the date of issuing the invoice. In case of goods sold and/or services rendered in December 2009, 1.5% BBO is due and should be paid no later than January 15, 2010.

For cash based entrepreneurs, the change of the normal BBO rate per January 1, 2010 of 1.5% implies that on all receipts as of January 1, 2010, regardless of the year in which the good was sold or the service was rendered, 1.5% BBO is due.