Baker Tilly Dutch Caribbean | Edition 1 2014

IN THIS ISSUE FOCUS ON TAX LAW
TAXES
2014
volume 02 | edition 01
The digital information
source from
BAKER TILLY
DUTCH CARIBBEAN

CONTENTS
Foreword pag 4
Appeal in Tax Matters pag 6
Penalties in Tax Law pag 8
The BT Network pag 10
All dressed up for your Taxes pag 12
In the Spotlight pag 14
Voluntary Disclosure pag 16
TIO/FIOD Investigation pag 17
Are you prepared for a TIO or FIOD invasion? pag 18
The firm or firms mentioned within this document are independent members of Baker Tilly International (unless otherwise expressly stated). Baker Tilly International Limited is an
English Company. Baker Tilly International provides no professional services to clients. Each member firm is a separate and independent legal entity and each describes itself as
such. Member firms are not Baker Tilly International’s agent and do not have authority to bind Baker Tilly International or act on Baker Tilly International’s behalf. None of Baker Tilly
International nor any of the independent member firms of Baker Tilly International has any liability for each other’s acts or omissions. In addition, neither Baker Tilly International nor
any other member firm has a right to exercise management control over any other member firm. © 2014
pag 2
pag 3

A DISPUTE WITH THE TAX AUTHORITIES OR A TIO OR FIOD
INVASION? BE PREPARED!
A feeling of duality surrounds taxes. Taxpayers aim to enjoy
as much tax advantages as possible, while the tax authorities
are bound by law to collect tax guilders.
FOREWORD
This makes for interesting
discussions and intriguing news
stories with large multinationals
trying to minimize their taxes and
the authorities as shepherds of
what’s ethical and what defies the
boundaries of good citizenship.
Such disputes may have fierce
influence on the reputation of the
concerned companies and their
management.
Are you prepared for a tax audit by
the Tax Authorities or even worse,
an investigation by the TIO or FIOD?
How to start a tax proceeding or
what to do when they appear on
your doorsteps demanding to see
your books immediately or want to
seize your computers? And we don’t
just mean having the books and
supporting documents ready; do
you know what to say, what to ask
and what to avoid saying or doing?
Be prepared!
In this edition of our Personally
Invested magazine, we aim to
give insight in the relationships
between you as taxpayer, whether
as business owner or as private
taxpayer and formal tax rules and
regulations. The articles provide
examples of dealings with the tax
authorities; what can be expected?
What are the do’s and don’ts.
We also introduce our new partner,
Arthur van Aalst, our specialized
tax attorney.
Arthur and his team are dedicated to
assist in case of a BAB audit, FIOD
or TIO investigation and other formal
tax matters that require insightful
knowledge of the tax jurisdiction and
law. Feel free to contact Arthur for a
copy of our latest instruction guide:
“How to act during a TIO or FIOD
investigation”.
Enjoy reading!
Victor Bergisch
pag 4 pag 5

If the Tax Inspector rejects a notice of objection against a tax
assessment, the taxpayer has the right and opportunity to file
an appeal with the Court of Appeals in Tax Matters (hereafter
the “Court”).
APPEAL IN
TAX MATTERS
Argumentation and timing
are essential
Such an appeal has to be filed within
two months after the date of the Tax
Inspector’s ruling.
After the Court has received the
letter of appeal, it grants the
Inspector the
opportunity
to invoke his
right to react
to the appeal
in writing. The
taxpayer may
be represented by a third party,
and a (tax) attorney is not explicitly
required in a tax court.
REPRESENTATION BY
A TAX ADVISOR
After the exchange of arguments
in writing, the Court will set a date
for a hearing. During this session
in front of the tax judge(s) both
parties get the opportunity to
plead their cases and the judge(s)
may ask questions. The taxpayer
or his representative should be
properly prepared to answer these
questions. In addition, he or she
should be prepared to receive and
counter possible new arguments of
the Inspector. Usually after several
months, the Court will render its
verdict. Wilco van Oosten, tax
advisor,
strongly
Both parties get the
opportunity to plead
their cases
advises
to engage
a tax
specialist:
“fiscal
expertise and the experience to
deal with these cases is essential,
especially because at this moment
there is no possibility to appeal a
verdict of the Tax Court! As there
is no further appeal option; it is
extremely important that the letter
of appeal contains all relevant facts,
arguments and references and that
all questions raised by the judges
are answered fully and precisely.”
pag 6 pag 7

PENALTIES IN
TAX LAW
Incorrect tax returns? You could
face incarceration.
Curaçao and St. Maarten’s Tax Legislations have a special
chapter on penalties in case of violations of tax laws. If a
taxpayer evades tax regulations, he risks punishment under
either administrative (tax) law or criminal (tax) law.
In case of criminal (tax) law, only
a criminal Court may impose a
penalty. This penalty may vary
from a fine to imprisonment or a
combination of the two. In general,
criminal prosecution only takes
place if the taxpayer deliberately
and/or regularly did not file tax
returns and/or evades paying large
amounts of taxes.
In most cases, a taxpayer
is punished on the basis of
administrative (tax) law.
The fines under this law can be
divided in ‘offence fines’ (in Dutch
“vergrijpboetes”) or ‘default fines’
(in Dutch “verzuimboetes”). Certain
officers of the Tax Authorities or
judges of aTax Court may impose
these fines.
An offence fine will be imposed in
case of more serious tax offences.
This fine may run up to 100% of
the tax not paid. The amount of a
default fine depends on specific
conditions such as the number of
prior defaults.
pag 8 pag 9

THE BT
NETWORK
PROUD SPONSOR CHALLENGE YOUR LIMITS
Being Personally Invested put us
right in de middle of the society we
work and live in.
Baker Tilly De Paus Vesseur is proud
sponsor of ‘Challenge Your Limits’.
Stefan Sluijter & John Ottevanger
from Curacao opted to participate
in the extremely challenging Absa
Cape Epic!
This 800 km off-road race organized
in Cape Town, South Africa, is in the
top 3 of the worlds most toughest
endurance races.
The avid cyclists realized that not
every challenge in life is by choice,
therefore they decided to use
their cycling challenge to start the
foundation Challenge Your Limits.
Challenge Your Limits goal is to
gather donations to benefit the
Soeur Hedwig School on Curacao,
helping them to buy sports materials
and equipment for the disabled
children. For more information, or to
become a sponsor yourself, go to
www.challengeyourlimits.org
NETWORKING
Are you doing business in multiple
locations around the world or do
you intend to do so? On a quarterly
basis, Baker Tilly International issues
a publication highlighting cross
border tax developments that may
BAKER TILLY’S WORLDWIDE REVENUE INCREASED IN 2013
Combined global revenues of our
member firms for the year ended
30 June 2013 were up 3% to
US$3.4bn. Our lower percentage
growth rate in recent years reflects
the ongoing difficult economic
markets in some parts of the world
following the global financial crisis.
Baker Tilly International has a
presence in almost every corner of
the world.
interest you. In this issue you travel
around the world… not in 80 days,
but in 9 pages.
• 137 countries
• 738 offices
• A global workforce
of 27,000
• Global combined revenues
for 2013
US$3.4BN, UP 3%
GLOBAL RESEARCH IDENTIFIES THE EIGHT KEY
PRINCIPLES OF SUCCESSION IN A BUSINESS.
That is a title we have all been
waiting for. Though our next
Personally Invested magazine will
give you more in-depth information
about the succession business, this
article provides a first glance at the
eight basic principles of succession:
Click for more info
Click for more info
Click for more info
• Succession is not retirement
• Start with readiness
• Set your goals before the journey
• Price is not first
• Harmony is a must
• Plan early, start earlier
• Equality of not equal
• Ask before you get lost
pag 10 pag 11

Be it personal or in a professional (business) capacity;
everyone has one experience or the other with Tax
Authorities. Ingrid Futselaar interviewed Michael Wulfsen,
owner of fashion boutique Wulfsen & Wulfsen and asked him
how he ‘dresses’ for such an occasion.
ALL DRESSED
UP FOR YOUR
TAXES
Experience of
a BAB audit
“Communication is key”, says
Wulfsen. “Every entrepreneur really
just wants to focus on his business
and doesn’t want to spend too much
time on taxes. In my experience,
it is important to build a respectful
relationship with the officials of the
Tax Authority. This is not always
easy, but cooperation and open
communication are absolutely
essential.”
Last year Wulfsen & Wulfsen
Curaçao was audited by the
Belasting Accountants Bureau (BAB,
the National Tax Audit Agency).
Michael Wulfsen explains: “Initially,
the communication with the BAB
team was very open. They explained
clearly how the audit would take
place, which years and taxes
they would audit and the intended
timeframe of the audit. However,
the whole process turned out to be
rather time-consuming and they did
not stick to all the agreements. In
addition, the open communication
we enjoyed at the beginning of
the audit, unfortunately ended in a
one-way flow. Though we had very
valid arguments, none of these
arguments or other remarks were
mentioned in the BAB report.”
Wulfsen continued to comment
that: “in the Netherlands, the Tax
Authority used the slogan ‘Leuker
kunnen we het niet maken, wel
makkelijker’ (We can’t make it more
pleasant, but we can sure make it
easier). In Curaçao, I sometimes
get the feeling that they make the
execution of tax audits more difficult
than necessary, whereas Curaçao
tax legislation is far less complex
than in the Netherlands or Aruba,
for instance. Digitalizing the process
(online) would already make a world
of difference and could make all of
our lives a lot easier.
Not just for the tax returns but
also for tax audits and overviews
of historical summaries and
outstanding amounts.
It’ll save both the entrepreneurs and
the Tax Authorities time.”
pag 12 pag 13

IN THE
SPOTLIGHT
Profiles to take note of
Arthur van Aalst
ARTHUR VAN AALST
Partner at Baker Tilly Dutch Caribbean. Arthur is a tax attorney, aiding and
advising his clients, both inside and outside the courtroom. Arthur brings
valuable knowledge and experience to the table when it comes to fiscal audits
and dealing with more in-depth and fierce investigations by TIO or FIOD.
Over the years he has been very successful in helping clients in various
difficult circumstances.
Shanda Halley
SHANDA HALLEY
Leads our practice in St Maarten. As a certified auditor, she knows audit
and has ample knowledge of financial issues, compilation and payroll
matters. Besides these traits she has good knowledge of fiscal matters,
in order to identify issues and accurately assess the assistance that you
will need. Shanda has experience in a variety of industries and is a true
business partner.
Caroline da Silva
CAROLINE DA SILVA AND FREENEY FELICIA
In January of this year Freeney Felicia and Caroline da Silva finalized their
Registered Accountants (RA) study, which is a valuable addition to our highly
qualified workforce. Eric Vesseur explains: “we invest in the professional
growth of high potentials like Caroline and Freeney to further improve our
service and the quality of our deliverables”.
Freeney Felicia
pag 14 pag 15

VOLUNTARY
DISCLOSURE
What if a taxpayer forgot to
report or incorrectly
reported taxable income in
their personal income or
profit tax return(s)?
Fortunately, the taxpayer may
request a so-called voluntary
disclosure (in Dutch “vrijwillige
verbetering” or “fiscale inkeer”) and
still submit the correct and complete
information to the Tax Authorities at
a later point in time.
A voluntary disclosure is only
possible as long as the taxpayer
was not aware or reasonably could
not have been aware that officials of
the Tax Authorities were familiar with
or about to become familiar with
the incorrectness of the filed tax
return. Hence, the rectification must
take place on a voluntary basis and
only before the tax authorities raise
questions or announce a tax audit.
The benefit of a voluntary disclosure
for the taxpayer is that the taxpayer
does not have to pay an offence
fine (in Dutch “vergrijpboete”) of
up to 100% but only a default fine
(in Dutch “verzuimboete”) with a
maximum of 15%. In Aruba there
will also be no offence fine, but
there is no maximum to the default
fine that can be imposed. Arthur
van Aalst: “Make sure that your
tax lawyer arranges that there will
be no prosecution on the basis of
a criminal provision as a result of
the voluntary disclosure. Pursuant
to tax regulations, a voluntary
disclosure avoids an offence fine or
criminal tax penalties but it does not
automatically avoid prosecution on
the basis of criminal provisions”.
TIO / FIOD
INVESTIGATION?
Have your tax attorney at your side!
Most taxpayers only deal
with Tax Inspectors or
the BAB.
In case these officials of the Tax
Authorities suspect that a taxpayer
deliberately or regularly evades tax
laws, they may contact an officer
of a tax investigation bureau. For
Curaçao and St. Maarten this is
the TIO (“Team Inlichtingen en
Opsporing”) and for the BES Islands
it is the FIOD (“Fiscale Inlichtingen
en Opsporingsdienst”). These tax
investigation bureaus will come into
action if a taxpayer is suspected of
a criminal tax offense. Arthur van
Aalst: “If an investigation officer
informs a taxpayer that he is
considered a suspect, don’t make
any further statements and contact
your tax attorney immediately.” The
investigative methods and tools
used by the TIO or FIOD are totally
different from investigations by the
Tax Authorities (e.g. the BAB),
as are the rights of a taxpayer and
the penalization. For instance,
a Government Tax Inspector is not
permitted to make use of invasive
methods such as wiretaps,
house searches or observations
of suspects.
And where the taxpayer generally
makes use of a tax advisor, he now
needs a tax attorney to represent
him during the hearings by the
TIO or FIOD officials or during the
sessions before a criminal Court.
pag 16 pag 17

ARE YOU PREPARED
FOR A TIO OR FIOD
INVASION?
The TIO or FIOD can appear at your doorstep unannounced,
demanding to see your books immediately. When they do,
are you properly prepared?
And we don’t just mean having the
books and supporting documents
ready; do you know what to say,
what to ask and what to avoid
saying or doing?
Baker Tilly Dutch Caribbean and
HBN Law recently joined forces
to give a presentation and
crash course in ‘Handling a
TIO or FIOD Invasion’.
Baker Tilly Dutch Caribbean and
HBN Law chose to do this together,
because the fields of expertise they
each bring to the table complement
each other, making the training
they gave to employees of financial
institutions all the more successful.
Baker Tilly Dutch Caribbean Partner
Arthur van Aalst is a specialized
Tax Attorney, while attorney Jeroen
Eichhorn of HBN Law has in-depth
knowledge of Civil Law.
Tax Attorney Arthur van Aalst: “When
seven TIO or FIOD investigators
suddenly show up at your doorstep,
the first person they see is the
receptionist. This receptionist must
display a strong footing and be able
to quickly switch to asking the right
questions, redirect the investigators’
questions and diligently inform
superiors of the situation at
hand.” During the presentation,
Jeroen Eichhorn of HBN Law and
Baker Tilly’s Van Aalst provided
receptionists, assistants and
managers of several local financial
institutions with clear instructions
on how to handle an unexpected
tax invasion.
Financial institutions such as
banks and trust companies are
often dependent on the input of
their clients. If these clients of
the financial institution in question
generate ‘black market’ revenue and
keep a shadow administration that
the institution does not know about,
the institution may involuntarily
be called as a witness, or even
worse, also become a suspect in
a criminal investigation. Eichhorn:
“When subsequently a tax invasion
by an investigation authority follows,
you had better be prepared.”
Common financial crimes include
fraud, forgery, and participation in a
criminal organization or intentional
false tax returns. In addition to heavy
fines, these offenses can result in
several years of incarceration.
Although all of the attendees of
the seminar were aware of the
possibility of a tax invasion, many
didn’t consider the situation in which
they could be involuntarily involved
in a criminal investigation into a
third party, such as a client or a
stakeholder. Besides this valuable
awareness, the attendees also
appreciated the tips and tricks
for handling the moment when
the investigators are already at
the doorstep. Baker Tilly Dutch
Caribbean and HBN Law are
satisfied with the turnout and glad
that they were able to be help some
of their clients, but also the financial
sector in general to be better
prepared.
“It’s better to be safe than sorry, and
in the end we all benefit from a clean
and ethical economy”, according to
Arthur van Aalst.
pag 18 pag 19

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pag 20