WILLEMSTAD – Curaçao will introduce the Income Inclusion Rule (IIR) as part of the OECD’s global minimum tax framework, with the measure applying retroactively from 2025.
The move means Curaçao will partially adopt the international Pillar Two tax regime, while leaving out the Qualified Domestic Minimum Top-up Tax (QDMTT), which many jurisdictions have implemented alongside it.
The Income Inclusion Rule allows parent companies to pay additional tax when profits earned by subsidiaries abroad are taxed below the agreed global minimum rate of 15 percent.
The mechanism is one of the core pillars of the OECD’s effort to reduce tax avoidance by multinational corporations.
According to the Curaçao government, the implementation of the IIR ensures the island remains connected to international tax standards while avoiding the more aggressive domestic tax measures that could discourage business activity.
The decision comes after the OECD released its revised Side-by-Side Package in January 2026, which introduced new safe harbor mechanisms and clarified how countries like the United States fit into the broader Pillar Two framework.
By applying the IIR retroactively to 2025, Curaçao aligns itself with the global rollout timeline already adopted by many other countries.
Tax specialists say the retroactive aspect may create compliance challenges for multinational groups with Curaçao operations, as they may need to review previous tax periods.
However, the government argues that limiting implementation to the IIR keeps the tax framework simpler and more manageable.
Officials say the approach offers legal certainty while keeping Curaçao aligned with international tax cooperation efforts.
For companies operating in Curaçao, the focus now shifts to understanding how the new rule will affect their tax structures and reporting obligations.