Dear Editor,

In 2019 Sint Maarten introduced the Law on the Prevention of Money Laundering and the Financ-ing of Terrorism, which law also amended various other laws, including the trade registry decree (“the Law”). The Law, amongst others, obligates businesses and other legal entities (entities) to register the Ultimate Beneficial Owners (UBOs) of such entities with the Chamber of Commerce. Every registered legal entity is obligated to register the personal information of its UBO(s). Personal information that must be provided is the name, surname, gender, address, the date and place of birth, nationality, sig-nature and initials of a natural person.

Recently the Chamber has informed the general public that entities had to register their UBO’s by July 1st, 2025, or face a fine up to Cg. 50,000.

However, the list of requirements imposed by the Chamber far exceeds what is mandated by law. The Chamber now demands, among other things: the CRIB number of the entity and the UBO(s), a copy of the UBO’s passport, an original shareholders register, and a signed declaration from the UBO stating that they will not engage in money laundering, terrorism financing, or any other illegal activity. If this information is not submitted, the Chamber will not accept the UBO registration. As a conse-quence, the entity will be in default.

There is no legal basis for these additional requirements. By enforcing them, the Chamber is break-ing the law and acting in violation of principles of good governance. Moreover, the Chamber claims that UBO information is accessible only to the Public Prosecutor, the Central Bank, the Financial Intel-ligence Unit, and the Tax Department. In fact, pursuant to Article 11 of the Trade Registry Ordinance, this information is publicly accessible.

One is left to wonder: if these requirements are not grounded in Sint Maarten law, what is their legal basis? It appears the Chamber mistakenly applies Curaçao law, not recognizing that Sint Maarten has been an autonomous country since 10 October 2010. Indeed, all the requirements listed on the Chamber’s website and in its UBO Registry Guide align with Curaçao’s legislation—not Sint Maarten’s.

This situation is doubly concerning because legal entities that wish to comply with their obligations are now forced to submit highly personal data without any proper legal basis or privacy safeguards. Curaçao law includes provisions restricting access to UBO information to authorized authorities. The Sint Maarten law does not. This means that any third party can access this (illegally collected) person-al information through the Chamber’s public registry, exposing UBOs and businesses to significant privacy and security risks.

We trust that the Chamber will acknowledge the gravity of this situation and take immediate steps to bring its practices in line with applicable Sint Maarten law. Should it fail to do so, concerned busi-nesses and their owners may be left with no other option than to seek judicial intervention.

Pieter Soons

Partner at BZSE, Attorneys at Law

Dear Editor,

When in passing I hear people saying that the police don’t care, it hurts me. Why should it hurt me? It hurts me because if it gets so far that the civilian can reach to that conclusion, that tells me that this is a pattern.

There have been instances in which I also have witnessed certain behaviors in the community which I can certainly say that in my days we would not pass that without attending to it. But I know that sometimes we would go come back because of what has priority.

You might ask yourself then why am writing this letter to you? After church on Sunday I had to stop in the area of the Sundial School because of the traffic. There were two ladies standing at the side of the road and I heard when one them who was referring to the supermarket opposite the school say: “They couldn't even pick up the empty bottles.” When I looked at what she was referring to, I saw the empty bottles on one of the three benches that were intentionally put there to accommodate whoever wanted to sit there and have a drink or perhaps also a snack.

I do not get any pleasure in having to mention this, but this is nothing in hiding. I believe, no I am sure that everybody who is involved in policing this country have seen this scenario. And not only there but by too many supermarkets. I do not know if the laws have conveniently been changed to accomodate the permit holders of supermarkets (of which, by the way, several are locals). In my days we did not know anything about a permit for a supermarket including a restaurant and bakery.

And with the same breath I have to mention that no kind of control is done by these supermarkets. (Prove me wrong.) I know that I will be mashing some corns but nobody can tell me that Chief John is not aware that by several supermarkets on Sint Maarten the proprieters have put benches on the outside of their place of business and whoever is passing by, whether with children in the car or not, can see people openly drinking alcohol. Are there not anymore laws in the books governing drinking in public?

I expect a reaction like "what about those people playing dominoes by the same Sundial School? My answer to that is “Exactly.” They are playing dominoes and the same way that question exists, the same way that question about openly drinking in front of the supermarkets should also be asked.

I am aware that two wrongs don’t make a right, so this would be playing right back to what should be done. Control and regulate the permits that everyone could get their fair share.

Those who are disregarding their duty as parents by hanging out in front of the supermarkets every afternoon, go home and supervise your children so that we would not have to be constantly hearing what the children of today are doing. And to the parents let me say this, especially the mothers, “Believe it or not, when you walk the street with your ‘inside, outside’ you turn off more men than you attract. Men do not stick with women who are “cheap”. And I know for a fact that “children become what they see, much quicker than what they are told.” Dress your children appropriately. Especially your “girl-children”. Leaving the children up to themselves is also a no-no.

I have asked this question on several occasions. This time I will direct it to the Minister of Justice. "Waarom maakt U geen gebruik van de Algemene Politie Verordening (APV)? The traffic ordinance regulates the behavior of the drivers. The APV regulates and sanctions the behavior of the general public. Loitering, the use of obscene language in public, nudity in public, public drunkenness, illegal assembly, etc.

I was very pleased to read about the intended investment for a drug rehabilitation facility. In this way those who are drunk will not be able to referring back to those who are “high” in public.

Let us make a start, but we have to be vigilant because, like I always say, I can stop my mouth from talking but I cannot stop my ears from hearing.

Someone was commenting on the last Parliament meeting. This person said that there was talk about who locking up who. When I heard who was involved I said to myself, “they not going to get my opinion in this.”

What we need is responsible parenting. We need parents having heart-to-heart talks with their teenage children. We need parents who can coordinate with their children’s teachers on a regular basis. And whether she is already a mother or not, a 13-year-old girl is not a woman. She is a female and even a mother, but she is not a woman.

Russell A. Simmons

Dear Editor,

It is positive to see ongoing discussions for tax reforms to change the Sint Maarten tax landscape. These changes are long overdue. Though the barrage of information may be confusing for professionals and laymen alike. As Marco Aalbers correctly mentions, the different taxes are intertwined and so are the proposed reforms. Therefore, a stand-alone view per tax leads to an incomplete and incorrect picture of the impact. Which is notable in the potential enactment of a Dividend Tax and the recently proposed profit tax adjustments.

We will now focus on the Dividend Withholding Tax (hereinafter Dividend Tax). Based on the remarks of the Minister of Finance it seems that this refers to the introduction, or actually, the enactment, of “The national ordinance on Dividend Withholding Tax 2000”.

Budget

For budget purposes the Minister estimated a budget by comparing the Dividend Tax with the Yield Tax (in Dutch: “opbrengstbelasting”) on the BES-islands [Bonaire, St. Eustatius and Saba – Ed.]. In first instance this seems as a fair comparison as the Yield Tax can be regarded as a form of Dividend Tax, though with a broader base, as foundations (“stichtingen”) and special purpose vehicles (“doelvermogens”) are included.

Next to that, the Yield Tax was introduced to replace the Profit Tax on the BES-islands. The Dividend Tax is an addition to the already existing tax landscape. In contrast to the Yield Tax, the Dividend Tax is a pre-levy for the local Income Tax and Profit Tax. Therefore, in these situations, it will not lead to additional tax revenue for the government. In this regard, the comparison by the Minister with the wage tax does makes sense, as it also acts as a pre-levy.

In general, Dividend Tax is not levied (or levied against a zero percent rate) in fiscal unity situations nor when the participation exemption applies (locally). Also, and this may seem obvious, Dividend Tax is only taxed on dividends. Distributions from, for example, permanent establishments (branches in layman terms) and private fund foundations are therefore out of scope of the Dividend Tax.

Mentionable exemptions are, (i) foreign shareholders with a 25%+ shareholding as included in the proposed legislation of 2000 and (ii) exempt companies. Also, lower rates may apply within the Kingdom or in case Double Tax Treaties are in place. In short, foreign shareholdings (no branches) with a shareholding of less than 25% will potentially lead to additional tax income. Or not?

Transparent entity

Wait, what about the announced introduction of the transparent company? In short, if you qualify for this regime, a legal entity is treated as a partnership. Legal entities with foreign shareholders that choose this treatment can potentially recognize a permanent establishment in Sint Maarten instead of a legal entity. As mentioned above, permanent establishments are out of scope of the Dividend Tax.

As mentioned earlier, the tax landscape is intertwined. In this case the potential additional budget created can be undone with the introduction of other new legislation.

Timing

It is correct that a timing difference, pulling tax payments forward, does occur. The question is: how much forward. In general, dividends over a year are established during the finalization of the financial statements, which happens in the following year. This is also recognized by the Minister, though interim dividends may occur. The Profit Tax deadline is 30 June and might be extended to 31 December. In practice it often occurs that the financial statements are only finalized after 30 June and even as late as the end of December.

Simplified example for Profit Tax (the receiver and distributer of the dividend are local legal entities), in case the financial statements are finalized by the end of March, which is early and is at the same time that the provisional profit tax returns must be filed. In this case, it is expected that the Profit Tax return will be filed before 30 June, so the timing impact is three months (ignoring the provisional return). Generally, you have two weeks to pay and file the Dividend Tax return, so effectively you gain two and a half months. Of course, it can be that the Profit Tax return is filed in December, in that case you gained eight and a half months (ignoring the provisional return).

In other case, for example within the Income Tax where the payment deadlines are broader, the time gained may be impactful.

Local impact

The Minister mentions that there is no/minimal local impact expected with the introduction of a Dividend Tax. Which might be correct for the total tax burden in case the Dividend Tax acts as pre-levy. But, as the Minister mentions, the legislation has a positive timing and liquidity impact for the government, therefore it obviously leads to negative timing and liquidity impact for local dividend receivers.

The example the Minister gives is correct at the distributing company level. Though not on the receiving end of the dividend distribution the (local) receiver does have the negative liquidity and timing effect.

Next to this, filing and paying a new tax leads to an additional administrative burden for (local) taxpayers and depending on the filing deadline (normally two weeks, which is short) to an increased penalty risk.

0% vs exempt (compliance)

Though the impact may seem the same, the effects of a 0% tax rate and an exemption can be different. If exemptions apply, normally no Dividend Tax returns should be filed when dividend is distributed. When zero percent applies then a Dividend Tax return should be filed. In the proposed legislation exemptions are included.

Though as the Minister introduces this legislation also to enhance compliance, it might be considered to include the zero percent rate. Though this will significantly increase the workload at the Inspectorate of Taxes and potentially lead to confusion for the taxpayer.

Even without the zero percent rate, the new tax will lead to additional work for the tax authorities. Ignoring the timing, it is questionable if the Dividend Tax will lead to significant additional tax revenues and whether these are higher than the additional cost created (for both the taxpayer and Inspectorate of Taxes).

Shifting away from dividend distributions

Additional considerations might be given to how taxpayers will react. Though, certainly not a reason to not introduce new taxes, however these effects should not be ignored. Some obvious examples to mitigate Dividend Tax are:

1. Instead of dividend distributions, loans might be considered.

2. Create a transparent company (or a permanent establishment).

3. Utilize other tax facilities.

4. Instead of distributing dividends, increase salary.

While some of these options may just shift the distribution away from the Dividend Tax to other taxes (potentially against lower rates), others may have adverse timing effects or lead to out-of-scope events.

Keep it simple

The national ordinance on Dividend Withholding Tax 2000 consists of 37 articles. By comparison, the Aruban Dividend Tax only consists of 11 articles (36 at introduction). This difference can be partly explained by the fact that the accompanying legislation in Aruba has been adjusted accordingly. For both business and Inspectorate of Taxes it would be beneficial to simplify the proposed legislation.

Going forward

After reading the above, you may have gotten a negative impression about introducing a Dividend Tax. This is incorrect. A Dividend Tax may have a place in the Sint Maarten tax landscape, amongst others for generating additional taxable income from foreign investors, for improved compliance and for timing purposes.

Declaring outdated legislation applicable, which has been written while the Dutch Antilles still existed and the transparent entity was not yet considered, without updating this legislation, diminishes effectiveness (yield) and disturbs the existing “balance” within the total tax system.

In order to keep calling the application of Dividend Tax moving forward, some reconsiderations are necessary in the author’s view. Luckily, it has been decided to postpone the introduction. So productive discussions can be started to improve the legislation.

Other questions to consider are, is the timing right or should we prioritize other changes first and give the Inspectorate of Taxes and business community ample time to prepare for changes.

In general, introducing new tax legislation does not have an immediate positive effect on tax compliance. Especially if other pillars for tax compliance do not yet have a solid foundation and contradicting legislation (Transparent Entity) is introduced almost simultaneously.

Also grandfathering rules should be considered. This to ensure that there is no doubt how “old” retained earnings, which originated before the introduction of the new Dividend Tax, should be treated. The original legislation for declaring the Dividend Tax applicable contains a one-year grace period to allow companies to upstream these retained earnings free of Dividend Tax. This might be rather short and hurt the liquidity of a company.

We must also consider the recent critical Audit Chamber report regarding the ex-officio assessment process, recent remarks made by COCI, and that (as we understand) the tax authorities are already understaffed. Simplifying the tax landscape will probably have a greater positive effect on compliance and revenue generated, while positively impacting the local businesses. Simplifying the tax landscape will also benefit the Inspectorate of Taxes and will give relief to their workload and can help aligning their internal processes, one of the concerns raised by COCI.

Stefan van Riezen,

Tax Adviser at Grant Thornton Sint Maarten

Voting in Parliament

Dear Editor,

  I listened to MP de Weever’s explanation about why she voted against the budget of the government she supports. While I fully respect (and given the explanation SHE gave, may even agree with) the MP, I am of the opinion that one must NEVER vote AGAINST the budget of a government one supports. Be absent, go the bathroom, fake a nausea spell, tell ’em your belly cramping, do whatever you have to do NOT to be present when voting on the BUDGET of YOUR Government is against your personal principles.

  And voting against supporting even a short term program to serve breakfast and/or lunch to schoolchildren that now go to school hungry, I say: a short term program is better than no program. While the short term is ongoing, with your wit, your talent, your contacts, your smarts, your smile, YOU can help find solutions, ways and means to turn that short term school feeding program into one that is year-round and longterm. Our school children will appreciate and applaud you.

Michael J. Ferrier