Aruba levies a profits tax on Aruba-resident companies (taxed on worldwide income) and on non-resident companies operating through a permanent establishment or permanent representative in Aruba, under the New Fiscal Framework (Nieuw Fiscaal Raamwerk, NFR). A dividend withholding tax applies to outbound distributions, and Aruba is a constituent country of the Kingdom of the Netherlands with its own separate tax legislation.
The tax year generally follows the calendar year, though a company may adopt a different accounting period with approval.
22% standard rate on net profit (35% for free-zone companies trading with entities located in Aruba, versus 2% for qualifying free-zone company profit from activity outside Aruba).
Steeply progressive, up to a top marginal rate of 52% on worldwide income for residents (tax residency triggered at 183+ days present in a calendar year).
Aruba has not introduced VAT (a planned 12.5% VAT reform has been indefinitely postponed); instead a combined 7% turnover tax applies (BBO 2.5% + BAVP 1.5% + BAZV 3%, as of 2023), covering the supply of goods and services and, since August 2023, imports. As an autonomous country within the Kingdom of the Netherlands, Aruba sets its own tax law independently of both the European Netherlands and the Caribbean Netherlands (BES islands) - see the Global Tax Guide's Special Tax Zones page for how these different Dutch Caribbean fiscal systems relate to one another.
Individual residency is determined by a facts-and-circumstances test examining home in Aruba, presence of close family, duration and regularity of stay, civil registry registration, local bank accounts, and professional or economic interests on the island - if the majority of these ties point to Aruba, the individual is a tax resident taxed on worldwide income; otherwise, non-resident status applies with taxation limited to Aruba-source income. A commonly cited practical benchmark is 183+ days present in a calendar year, though the underlying test is multi-factor rather than a pure day count. Corporate residency generally follows incorporation or effective management in Aruba.
Aruba profits tax applies to a foreign company's income earned through an enterprise carried on via a permanent establishment or permanent representative located in Aruba, as well as to Aruba-source real estate income; companies with their place of incorporation or their place of management and control in Aruba are taxed as residents on worldwide income.
No CFC legislation exists in Aruba.
No statutory thin capitalization ratio or interest-limitation rule was identified in available sources for Aruba specifically.
Aruba NVs and Aruba Exempt Companies (AVVs/AAVs) may elect fiscal transparency treatment and be taxed as a partnership, a domestic Aruba-specific quasi check-the-box election rather than a general classification system for foreign entities. As a constituent country of the Kingdom of the Netherlands with its own separate tax law, Aruba is not automatically bound by the Netherlands' ATAD-derived anti-hybrid mismatch rules, and no dedicated Aruba anti-hybrid regime addressing double-deduction or deduction-without-inclusion outcomes has been identified; a reader should not assume Dutch anti-hybrid rules extend to Aruba.
No domestic FBAR-equivalent regime requires Aruba residents to separately disclose foreign financial accounts. Aruba is a CRS participating jurisdiction, exchanging financial account information since 2018, so Aruban financial institutions report non-resident account holder information to partner tax authorities. US persons remain independently subject to FinCEN Form 114 (FBAR) and potentially Form 8938 regardless of Aruba's own rules.
Aruba provides a broad participation exemption. Dividends and capital gains from a domestic participation are exempt without further conditions. For a foreign participation, the exemption applies only if the shares are not held as a portfolio investment and the foreign entity is itself subject to tax on its profits; costs relating to the participation are generally non-deductible (except interest) and must be charged against the exempt participation income.
Foreign tax paid may be credited against Aruba profits tax on the same income, but the credit is limited to the amount of Aruba tax payable on that foreign-source income.
Aruba has no network of bilateral double tax treaties with foreign sovereign countries - it has its own tax legislation since obtaining "status aparte" within the Kingdom of the Netherlands in 1986, and has not concluded classic bilateral DTAs with countries such as France, Canada, or other Latin American states. Aruba's double-tax relief instead comes from two distinct sources. First, the Belastingregeling voor het Koninkrijk (BRK), an intra-Kingdom tax arrangement shared with Curacao, Sint Maarten, and the Netherlands (including the BES islands): Curacao and Sint Maarten have since replaced the BRK with their own updated bilateral regulations with the Netherlands (the BNC and BNS respectively), but Aruba has not, so the original multilateral BRK still governs Aruba's relationship with the Netherlands. Under the BRK, dividends flowing from the Netherlands to Aruba are taxed at 7.5%, reduced to 5% where the Aruban recipient holds at least 25% of the paying company's capital. Second, Aruba has concluded a small number of standalone bilateral Tax Information Exchange Agreements directly with third countries, including the United States and Spain (2008); these facilitate information exchange only and do not provide the withholding-rate reductions or profit-allocation rules of a full double tax treaty.