Tax Changes for Statia from 1 January 2025
From 1 January 2025, new tax measures will take effect in Statia to protect low incomes and modernise the tax system. One major change is that the tax-free allowance will be linked to the legal minimum wage, ensuring that residents with low incomes won’t have to pay taxes. This linkage will be based on Statia’s minimum wage, the highest in the BES islands. The tax-free allowance will also be adjusted annually to align with economic changes, helping to protect vulnerable groups.
Additionally, the threshold for the second income tax bracket will be significantly reduced, from $322,769 to $51,250, which may affect higher earners. This change is aimed at making the tax system more balanced and progressive, distributing the tax burden more fairly.
There will also be adjustments to property taxes. The tax rate for hotels will increase from 10% to 11%, reflecting the government’s effort to collect more revenue from the tourism sector. Additionally, the investment scheme, which currently allows businesses to benefit from tax breaks for ten years, will be shortened to five years. This change aims to encourage faster economic development while maintaining an incentive for investment.
Further increases include revenue tax and profit from substantial interest, which will rise from 5% to 7.5%, bringing these rates closer to international standards. Another significant change is the removal of the exemption for severance payments and compensation received as part of pension entitlements, meaning that these payments will now be subject to tax.
To ensure the changes do not negatively impact residents, the government will closely monitor the effects throughout 2025. If the measures cause incomes to fall below the social minimum, the government will consider corrections. Alongside these financial adjustments, the government plans to simplify payroll administration and improve tax legislation, making the system more transparent and easier to navigate for businesses and individuals alike.
For a complete list of changes, visit: https://www.rijksoverheid.nl.