The quarter one deadline is fast approaching (April 30, 2020) to report to the Central Bank of Aruba (CBA) for any payments abroad. Are you ready? Not sure of the next steps? Contact CATC-HCC to be prepared and ready to file your report as needed to avoid penalties. Read the details below.
Pursuant to article 2, paragraph 1 of the State Ordinance Foreign Exchange Commission (SOFEC), residents and companies of Aruba shall pay the Government of Aruba (GOA) a commission by the name of “foreign exchange commission” for payments to abroad.
Pursuant to article 5 of the SOFEC, the CBA is entrusted with the levy and collection of the Foreign exchange commission (FEC) in accordance with the provisions of the SOFEC. Residents have to pay the FEC directly to the CBA or through an institution that has been designated pursuant to article 4 of the SOFEC by the CBA.
Payments abroad are defined as:
- a. Payments with domestic instruments (e.g. cash Afl).
b. Payments through the debit of an account denominated in Afl.
- a. Payments with foreign instruments of payment (e.g. USD/EUR).
b. Payments through the debit of a foreign currency account (e.g. USD resident account).
- Payments made through the debit of an account denominated in foreign currency held abroad (foreign bank account), or through the debit of a current account with a person or company domiciled abroad (foreign intercompany account), whether electronically or not.
Rate of the FEC:
Article 3 of the SOFEC states that the rate of the FEC amounts to 1.3 percent of the amount expressed in Aruban florin of the payment to a non-resident. Official selling rates are used for the conversion of foreign currency to Aruban florin (e.g. for USD 1 x Afl. 1.80).
Infringement of the above mentioned shall be punished with imprisonment not exceeding six months and/or a fine not exceeding twenty-five thousand florins.
The CBA may impose a fine and/or freeze your bank account if you do not comply with these reporting requirements.
For example, companies that have to pay the FEC commission:
- A company established on Aruba that transfers money from Aruba to any foreign bank account
- A company that makes payments from a denominated account held abroad (foreign bank account) to a person or company domiciled abroad (foreign intercompany account), whether electronically or not
Let’s say company X transfers the equivalent of AWG 30,000 to their bank account in the United States, they will have to pay 1.3% over the AWG 30,000 to the CBA. This equates to AWG 390.
Do not delay. Contact us today to arrange for a review of your payments abroad.
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