Curaçao, as a growing international financial centre, has aligned its tax policies with international transparency standards, including the OECD’s Base Erosion and Profit Shifting (BEPS) Action 13 on Country-by-Country Reporting (CbCR). This article provides Chief Financial Officers (CFOs) and financial executives operating in Curaçao with a clear understanding of the CbCR requirements, including applicability, reporting procedures, deadlines, penalties, and resources for compliance.

Applicability of CbCR in Curaçao

Criteria for Reporting:

• The CbCR requirements apply to multinational enterprise (MNE) groups with consolidated group revenue of €750 million or more in the preceding fiscal year.
• The reporting obligation generally falls on the ultimate parent entity of the MNE group if it is tax resident in Curaçao.
• A surrogate parent entity in Curaçao may also be required to file the CbC report if the ultimate parent is based in a jurisdiction that does not have CbCR regulations or does not exchange reports.

Relevant Legislation:

• Curaçao has adopted CbCR rules in line with the OECD’s BEPS Action 13. These rules have been integrated into the National Ordinance on International Assistance in Tax Matters.
• Additional information and updates on local tax laws and CbCR regulations can be accessed through the Curaçao Tax Authorities and the Ministry of Finance of Curaçao.

Reporting Requirements

Information to be Reported:

• The CbC report should include aggregated data on global revenues, profits before tax, income taxes paid and accrued, capital, accumulated earnings, number of employees, and tangible assets for each tax jurisdiction in which the MNE group operates.
• The report must also include details of all constituent entities within the MNE group, identifying the tax jurisdiction of each entity and its main business activities.

Form and Submission:

• The CbC report must be filed using the standard XML format, following OECD guidelines.
• In Curaçao, the report should be submitted through the Tax Administration’s electronic filing system. This system ensures secure submission of sensitive financial data.
  • Further details on the submission process can be found on the Curaçao Tax Administration website.

Filing Deadlines

• The CbC report must be filed within 12 months after the end of the MNE group’s fiscal year. For example, if the fiscal year ends on 31 December 2023, the report is due by 31 December 2024.
• MNEs with operations in Curaçao must also notify the Curaçao tax authorities of the entity responsible for submitting the CbC report and where it will be filed, in case it is filed outside of Curaçao.

Penalties for Non-Compliance

Penalties:

• Non-compliance with CbCR obligations, including failure to submit a report, late submissions, or providing inaccurate data, can result in significant penalties.
• Financial penalties for non-compliance in Curaçao can be imposed, with fines ranging from ANG 25,000 (approximately €12,500) up to ANG 1,000,000 (approximately €500,000), depending on the nature and severity of the violation.

Defences:

• Penalties may be reduced or waived if the reporting entity can demonstrate that non-compliance was due to reasonable cause, such as technical difficulties or inadvertent errors.

Confidentiality and Use of Information

Data Protection:

• Curaçao adheres to the OECD’s confidentiality standards for CbCR. The information provided in the reports is shared only with tax authorities in jurisdictions that have signed a competent authority agreement with Curaçao.
• The CbC reports are used for risk assessment purposes and are not available to the public.

Ad