Tax rate by region Aruba

Select region

The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Aruba’s tax landscape for indirect taxation is defined by a 7% layered turnover tax (comprising BBO, BAVP, and BAZV), following the indefinite postponement of its proposed 12.5% VAT reform. Notably, this 7% combined tax strictly applies to non-resident providers of digital goods and electronic services selling to local consumers, requiring registration from the very first transaction. Compliance is fully digital, with mandatory monthly electronic filings and payments due by the 15th of the following month.

Aruba

Aruba does not operate a VAT system; it levies a layered turnover tax with a combined rate of 7% (BBO 2,5% + BAVP 1,5% + BAZV 3%) from 1 January 2023.

Official government link: Official Government Link

E-products and services VAT/Sales tax rate

Reduced tax rate product categories

No reduced rate for digital goods and services

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

After the first sale

Online registration possible

Yes

Local representative needed

Optional

Registration procedure

Register with DIMP via the BOi online portal; non-residents may appoint a fiscal representative who substitutes them for filing and payment obligations

List of digital and electronic services liable for tax

SaaS, Software, Video Games, Digital Products

Penalties

Default surcharge for late filing/payment: Afl. 250 minimum, Afl. 10,000 maximum.

Gross negligence: up to 100% of tax due.

Registration threshold

First transaction

Filing interval

Monthly

Filing deadline

By the 15th of the month following the reporting period

E-invoicing requirements

Mandatory

How-To Guides: Aruba SaaS VAT

Step: 1 Threshold

Effective January 1, 2023, Aruba requires non-resident vendors of certain services, including digital services, to consumers (B2C) in Aruba to register for and collect VAT, regardless of the sales amount.

Step: 2 Business Registration

The process for foreign electronic service providers is a specific registration for the Turnover Tax (BBO/BAZV/BAVP) on electronic services. This is done through the Departamento di Impuesto (Tax Department).

Step: 3 TIN/VAT Number

The tax identification number issued to the business would be the local tax ID for the purposes of the Turnover Tax. The issuing authority is the Departamento di Impuesto (Tax Department).

Step: 1 Standard VAT Rate

The combined tax rate, generally referred to as the Turnover Tax (BBO/BAZV/BAVP), is 7.00% on the gross price of the service.

Step: 2 Determine if you need to register.

To calculate your tax amount, use the following formula:

VAT Amount = Gross Price X 7.00%

Step: 1 Selling B2C

The non-resident seller of electronic services must collect and remit the 7.00% Turnover Tax (BBO/BAZV/BAVP) from the private consumer in Aruba. The place of supply is deemed to be the residence of the customer.

Step: 2 Selling B2B

The non-resident seller does NOT charge the 7.00% tax. The invoice should state that the transaction is subject to the Reverse Charge Mechanism, making the Aruban business customer liable for the tax.

Step: 3 Invoice Requirements

For domestic sales, the mentioning of the BBO/BAZV/BAVP as a separate line item on an invoice/receipt is prohibited, meaning the price must be tax-inclusive.

For cross-border B2B sales subject to Reverse Charge, the invoice issued by the foreign supplier must typically include:

the supplier’s name
their tax ID
the customer’s name and address
an invoice number
a description of the service
the NET price
clear statement indicating that the Reverse Charge Mechanism applies

Step: 1 Filing Interval

Filing interval is generally Monthly for the Turnover Tax (BBO/BAZV/BAVP).

Step: 2 Filing Deadline

The tax return is typically due on the 15th day of the month following the reporting period.

Step: 3 Submission

Submission is via the electronic system of the Departamento di Impuesto (Tax Department). Taxpayers may be required to appoint a local tax agent. Payment methods are typically provided by the Tax Department.

Step: 4 Record Keeping

The minimum record-keeping period is generally 7 years for tax-related records.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Aruba’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

Overwhelmed by SaaS sales tax compliance?

Our team of SaaS tax experts is here to help. Contact us today for a free consultation.

Talk to an Expert