WILLEMSTAD – The Parliament of Curaçao has approved a new bill proposed by the MFK political party aimed at increasing youth employment. The legislation provides tax incentives to encourage employers to hire young workers with no prior experience.
Under the new law, young people between 18 and 29 years old earning up to 37,168 guilders per year will be exempt from income tax and social security contributions. This tax benefit will apply for two years and can be extended once, for a maximum total of three years. However, once an employee reaches 30 years of age, the exemption will automatically expire.
Requirements for Employers
Employers must meet specific conditions to qualify for these tax benefits. They must:
Maintain proper administrative records.
Have no tax violations or fines in the past two years.
Contribute to the training and development of young employees.
Offer a permanent contract or at least a six-month employment term.
Overtime Tax Exemption
The new law also introduces a tax exemption on overtime pay. Employees earning up to 81,229 guilders per year can benefit from a tax-free allowance for up to 10 overtime hours per week. Employers must apply for this exemption through the Tax Inspectorate.
This initiative aims to reduce youth unemployment while encouraging businesses to invest in long-term workforce development.