BBO, BAVP and BAZV in Aruba: the 7% levy explained

Aruba has no VAT. Instead, businesses pay three levies on everything they receive for their goods and services: BBO (2.5%), BAVP (1.5%) and BAZV (3%), 7% in total. Unlike VAT, the 7% is not added to the invoice — the law forbids showing it — and it is filed and paid every month, in one return in the BOi portal, by the 15th of the following month.

What are BBO, BAVP and BAZV?

BBO is the belasting op bedrijfsomzetten, Aruba’s turnover tax. BBO and BAVP are both set out in the Landsverordening BBO; BAZV is an earmarked levy for the AZV, laid down in a separate law that follows the same rules article by article. Since 1 January 2023 the three together come to 7%:

• BBO: 2.5%
• BAVP: 1.5%
• BAZV: 3%

You do not file them separately: one return with the Departamento di Impuesto (DIMP) covers all three.

How is the 7% calculated?

The levy is charged on everything you receive for your goods and services: the gross amount. If you receive Afl. 800, you owe Afl. 56. It is not 7/107 of the 800, because there is no tax inside the price to take out. In your books, revenue stays at the gross amount and the 7% is a business expense, which is also how DIMP explains it.

Why can’t you show the levy on your invoice?

Article 9b of the Landsverordening BBO forbids putting the tax on an invoice or receipt, and forbids quoting prices excluding it. The fine is up to Afl. 10,000. Your customer simply pays your price, and the levy is your cost. What your invoice must show is your persoonsnummer and the date of supply (art. 9a).

Cash basis or invoice basis?

In Aruba, the cash basis is the rule, not the exception: the levy is due in the month the money comes in. An invoice sent in March and paid in May belongs on the May return. On request, the tax office allows the invoice basis (art. 9).

What is exempt or outside the scope?

There is no 0% rate in Aruba. There are exemptions, and a few services that fall outside Aruba altogether:

• Goods you ship out of Aruba are exempt, provided you keep the proof of export.
• A service is taxed where the supplier is (art. 7). A service you supply from Aruba is taxed in Aruba, also when the customer is abroad.
• The exception: electronic, telecom and broadcast services to a customer abroad fall outside Aruba.
• Other exemptions include interest, dividends, shares, the rent of a home and prescription medicine.

The same rule works the other way round. When a foreign supplier without a permanent establishment in Aruba provides electronic, telecom or broadcast services to your Aruban business, the levy is reverse-charged: you pay the 7% yourself (art. 2 lid 3). There is no deduction for it, so it is a cost. The return asks you whether this applies.

Small businesses: a natural person with a turnover of no more than Afl. 50,000 is exempt by law (art. 14a). Going over the limit makes you liable from that supply onward and in all following years, and registering voluntarily is permanent.

Can you deduct the levy paid on imports?

Customs charges 7% BBO, BAVP and BAZV on the customs value of imported goods. Since 1 August 2023, the levy paid on trade goods — goods you import to resell, also after processing that does not change their nature — is deductible on your return in the month you paid it at customs, and a surplus is refunded (art. 10). For goods you use yourself, such as a delivery truck, a freezer or building materials, the levy is a cost. A small business that is exempt cannot deduct it.

How often do you file, and when is it due?

Every month: Aruba has no quarterly or yearly return. One return covers BBO, BAVP and BAZV together, and the return and the payment are due by the 15th of the following month. A return is required even in a month without turnover. You file in BOi, which needs two-step login. The form asks for your exempt turnover, your taxable turnover, the 7%, the deduction for imported trade goods and the amount to pay or reclaim.

What about annual accounts and profit tax?

An NV or VBA prepares its annual accounts within eight months after the year end; the shareholders can extend that by six months. The accounts are filed with the Chamber of Commerce within eight days after they are adopted, and the accounts of a VBA are not public. A sole trader, a partnership (vof) or a foundation also prepares them within eight months, but does not file them.

Profit tax is 22%. The return and the payment are due within five months, or you file a provisional return with payment within those five months and get six months more. The turnover in your profit tax return should reconcile with your monthly BBO returns, and records are kept for ten years.

Common mistakes

• Adding 7% to the invoice. It is forbidden; the customer simply pays your price.
• Calculating 7/107 of what you received instead of 7% of it.
• Treating services to foreign customers as exempt. Only exported goods and electronic, telecom and broadcast services to customers abroad are outside the levy.
• Skipping the return in a month without turnover.
• Deducting the import levy on goods for your own use.
• Forgetting the reverse charge on digital services bought from abroad.
• Netting a credit note or a bad debt yourself. A refund goes by request to the tax office (art. 13).

How CORA helps with BBO, BAVP and BAZV

CORA for Aruba is online accounting software that follows these rules. It does not file the return for you; it prepares it:

• One levy of 7%, split into BBO, BAVP and BAZV, on what you actually receive: cash basis by default, invoice basis if you choose it.
• Never on the invoice: CORA keeps the levy off invoices, quotes, PDFs and the payment page, and books it as a cost. Your persoonsnummer and the supply date are printed, and CORA warns you when the number is missing.
• Your monthly return in the order of the BOi form, due by the 15th. You copy the figures into BOi and mark the month as filed; CORA warns you if the books change afterwards.
• Imported trade goods deducted with a surplus refunded, exports exempt, electronic services abroad outside Aruba, and the reverse charge on such services bought from abroad.
• For a sole trader up to Afl. 50,000, the levy switched off, with turnover tracked against the limit.
• Florins and dollars side by side, and a free read-only login for your accountant.

CORA costs from $20 a month and the first 14 days are free. See pricing or start your free trial.

This article explains the general rules and is not tax advice. For your own situation, check with the Departamento di Impuesto or your accountant.