The Pensionado Scheme for your retirement on Curaçao: Your Tropical Tax Paradise

The Pensionado Scheme for your retirement on Curaçao: Your Tropical Tax Paradise

Are you tired of the cold and rain in your home country and ready for a sunny change in your life? If the idea of enjoying the tropical sun while being treated favorably for tax purposes sounds appealing, then the Pensionado 

Scheme in Curaçao might be for you. Our island offers not only a delightful climate and a relaxed lifestyle but also attractive tax benefits for the savvy pensioner.

A pensionado pays only 10% income tax on foreign income!

And why is this also a great scheme for us as real estate agents? You are required to buy a house, and that’s where we come in.

What is the Pensionado Scheme for your retirement on Curacao

Curaçao has something special: a tax scheme that makes it attractive for people to settle here and enjoy their retirement. This scheme, known as the Pensionado Scheme, allows you to pay only 10% income tax on your foreign income. 

This includes income from pensions, dividends, and other capital gains.

Who Can Benefit from This Favorable Tax Rate in Curaçao?

Although the scheme is called ‘Pensionado,’ it is not exclusively for retirees. You can benefit from this scheme even if you have not yet reached retirement age, as long as you meet the following conditions:

– Age Requirement: You must be 50 years or older upon registration in the civil register of Curaçao.
– Residency Requirement: You must genuinely live in Curaçao; merely moving on paper is not allowed.
– Asset Requirement:Within 18 months of your arrival, you must own a property with a minimum value of NAF 450,000 (approximately €230,000) or reside in a monumental rental house of the same minimum value.
– No Local Employment: You cannot work in Curaçao unless you are a director with at least a 40% share in a local company.

Benefits of the Pensionado Scheme for your retirement

– Tax Advantage: With a tax rate of only 10% on foreign income, Curaçao offers one of the most favorable tax climates in the world.
– Quality of Life: Living in Curaçao means enjoying a paradise with beautiful beaches, exotic cuisine, and vibrant culture. Many things are done ‘poko-poko’ – nice and relaxed.
– Economic Contribution: By buying a house or investing in real estate, you help the local economy and contribute to the island’s development.

Steps to Become a Pensionado for your retirement on Curacao

Before embarking on this adventure, it is important to follow the correct steps:

1. Register in the Civil Register: Your adventure begins with formal registration in the civil register of Curaçao. Additionally, you need a declaration of right of residence.
2.  Inform the local Tax Authority: Within two months of your arrival, you must inform the tax authority of your intention to use the Pensionado Scheme.
3. Meet the Housing Requirement: Buy or rent your dream home that meets the requirement of NAF 450,000.

Premium Obligations under the Pensionado Scheme for your retirement on Curacao

Despite the tax benefits offered by the Pensionado Scheme, users of this scheme are still required to pay certain premiums. These include:

– Basic Health Insurance (BVZ): Essential for covering your basic medical needs on the island.
– General Insurance for Special Medical Expenses (AVBZ): This insurance covers special medical expenses not covered by the BVZ.

Depending on your age, there are two more important premiums:

– General Old Age Insurance (AOV): Serves as a pension insurance for the elderly.
– General Widows and Orphans Insurance (AWW): Provides support for your survivors in the event of your death.

It is important to consider these obligations to fully benefit from the scheme and avoid unexpected financial burdens.

When Does the Pensionado Scheme Expire?

The benefits of the Pensionado Scheme for your retirement on Curacao are significant, but there are specific situations where this scheme can expire:

– Local Income: If you or your partner receive income from local employment, self-employment, or other activities in Curaçao, your right to the scheme will expire for that year. 

The normal rate will then apply to your entire income, including foreign income.
– Repeated Violations: If you fail to meet the conditions of the scheme for two consecutive years, for example, by not submitting your tax return on time or incompletely, your right to the scheme will expire completely.
– Housing Requirement: The right to the scheme also expires if you do not own a property with a minimum value of NAF 450,000 for personal use in Curaçao for longer than six months. 

But that’s the least difficult part – just contact International Fine Living, the real estate agent of Curaçao!

Conclusion

Whether you are looking for a place to relax after a busy career or want to enjoy the fruits of your hard work earlier, the Pensionado Scheme for your retirement on Curaçao offers a tempting 

combination of tax benefits and a high quality of life. Ready to take the step? Contact us and discover how you can buy your dream home and start a new chapter on our beautiful Caribbean island. 

Your retirement awaits you, and it’s sunnier than ever!