Aruba Tax Changes 2026
Aruba Introduces Important Tax Changes Effective January 1, 2026
Effective January 1, 2026, Aruba introduced several important tax measures aimed at supporting employers, attracting international talent, stimulating investment, and encouraging entrepreneurship.
Below is a summary of the key developments.
1. Changes to the Fringe Benefits Regulation
Several employer benefits have been adjusted to better reflect today's workplace environment.
Company Car Taxation
The calculation of taxable benefits for company cars will change significantly.
Key changes include:
- The 15% taxable addition will now be based on the book value instead of the catalog value.
- Hybrid vehicles qualify for a reduced rate of 10%.
- Fully electric vehicles qualify for a reduced rate of 5%.
- The tax-free mileage reimbursement for business travel using a private vehicle increased to AWG 1.20 per kilometer.
Organizations should review their fleet policies and payroll administration to ensure compliance.
Employee Benefits
Several monthly allowances have increased, including:
- Car allowances
- Representation allowances
- Telephone and internet allowances
- Health and well-being benefits of up to AWG 125 per month, including gym memberships, wellness programs, and mindfulness activities
Employers should update their internal policies and payroll systems accordingly.
2. Expanded Expat Regime
Aruba has expanded its Expat Regime, making it easier for organizations to recruit and retain qualified professionals from abroad.
The regime now offers broader eligibility and enhanced benefits for qualifying employees.
Who may qualify?
Employees recruited from abroad may qualify if they:
- Have lived outside Aruba for at least five consecutive years before employment;
- Meet the applicable salary threshold or possess at least an HBO-level qualification combined with five years of relevant work experience.
Key Benefits
Qualifying employees may benefit from:
- Housing allowances
- School tuition reimbursements
- Benefits in kind
- Annual travel tickets
- Relocation and transportation benefits
- Tax-free signing bonus (subject to conditions)
For employers, the updated regime provides additional opportunities to attract international talent while offering competitive employment packages.
3. Investment Incentives for Oranjestad & San Nicolas
To encourage redevelopment, qualifying projects within designated areas may benefit from:
- 10-year exemption from profit tax and dividend withholding tax.
- Temporary exemptions from transfer tax and certain indirect taxes during 2026 and 2027.
- Additional incentives for qualifying redevelopment projects that meet the required investment conditions.
4. New Start-Up Tax Policy for Aruba
A dedicated Start-up Policy has been introduced to stimulate innovation and entrepreneurship.
Eligible businesses operating in designated sectors may benefit from:
- Profit tax exemption
- Increased investment allowance
- Business loan deduction
- Simplified customary wage rules
- Small entrepreneur regulation
How Can Grant Thornton Aruba Help?
Understanding and applying tax legislation can be complex. Our Tax specialists can help your organization:
- Review payroll and employee benefit policies
- Assess eligibility for the Expat Regime
- Evaluate investment incentives
- Structure new business ventures
- Maintain ongoing tax compliance
Want to explore the changes in more detail?
Download our complete Tax Changes 2026 publication for a comprehensive overview of the latest developments and practical guidance for employers, investors, and entrepreneurs.
Have questions? Contact our Tax team to discuss how these developments may affect your organization.
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