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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Aruba Phase 2 Review

This report for Aruba has been published on 16 Mar 2015. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   NVs are not required to keep identity information on the owners of bearer shares issued prior to 2012. Furthermore, the custodian arrangement for AVVs may not be sufficient. The law abolishing the issuance of new bearer shares does not fully address these legacy issues.   Aruba should ensure that identity information on the owners of bearer shares in NVs and AVVs issued prior to 2012 is available.  
Phase 2 Rating Factors Recommendations
Partially Compliant.   Aruba does not have a regular system of oversight to monitor compliance with the requirements on NVs, VBAs, partnerships and foundations to keep and file ownership and identity information. Furthermore, there may be instances when AVVs and NVs do not have a legal representative in Aruba. Amendments to the Commercial Code create an obligation on all companies to submit a copy of the shareholder register to the Chamber of Commerce and Industry on an annual basis. However these amendments are recent and have not yet been sufficiently tested in practice.   Aruba should ensure that compliance by all entities with ownership and identity information-keeping and filing requirements, including the effectiveness of the recent amendments to the Commercial Code, is appropriately monitored and enforced.  
Aruba amended the General Tax Ordinance requiring Limited Partnerships to maintain a register of their limited partners and Foundations to maintain a register of their beneficiaries. Since the amendments were only enacted in November 2014  Aruba should monitor the practical implementation of these amendments to ensure their effectiveness in practice.  
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.   While the combination of requirements set out in the Civil Code, Commercial Code, the General Tax Ordinance and the regulatory ordinances require that reliable accounting records are held by all entities, the only oversight is carried out by the tax administration which could be more rigorous in application. Furthermore, there may be instances when AVVs and NVs do not have a representative in Aruba which could pose a challenge to enforcement. However, NVs and AVVs are under a new legal obligation to file their financial statements with the Chamber of Commerce and Industry annually for financial years starting on or after February 2013 but these requirements remain untested in practice.  Aruba should ensure oversight of the obligation to hold accounting records in all cases and monitor the implementation and operation of the new obligation for NVs and AVVs to file financial statements with the Chamber of Commerce and Industry. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.   Aruba received two requests for banking information during the review period. In one case Aruba experienced delays in accessing banking information and compulsory powers were not used. Banking information in this case was obtained by the tax administration after one year. However, in the other case the information was obtained from the bank within one month and the Aruban authorities have indicated that banking information is regularly and efficiently accessed for domestic tax purposes.   Aruba is recommended to use its compulsory powers in all EOI cases to ensure banking information for exchange of information purposes is obtained in a timely manner. 
Aruba has made amendments to the General Tax Ordinance in respect of the role of the Minister of Justice in criminal tax matters and to clarify the scope of legal and professional privilege. Since the amendments were only enacted in November 2014, they could not be tested in practice.  Aruba should monitor the practical implementation of these amendments to ensure their effectiveness in practice. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.   Aruba has made amendments to the General Tax Ordinance to clarify the language regarding the subjective test of the Minister of Finance. Since the amendment was only enacted in November 2014, it could not be tested in practice.  Aruba should monitor the practical implementation of this amendment to ensure its effectiveness in practice. 
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     Aruba should continue to develop its EOI network with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.      
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Largely Compliant.   During the period under review, delays were experienced in responding to incoming requests. These were caused by the lack of delegated authority, the two month stand-by period and a lack of clear internal procedures. In March 2014, Aruba delegated the Competent Authority to the Director of the Department of Taxes to reduce delays in responding to requests. However, this has not been sufficiently tested in practice.   Aruba should monitor the use of the internal procedures in practice and develop them further to ensure it can respond to EOI requests in a timely manner in all cases.  
During the period under review Aruba did not send status updates to requesting jurisdictions.   Aruba should systematically provide an update or status report to its EOI partners in situations when the competent authority is unable to provide a substantive response within 90 days.