Marco Aalbers.
PHILIPSBURG--Tax expert Marco Aalbers says the recent clarification that St. Maarten residents are exempt from room tax when staying at local hotels, apartments and guest-houses does not eliminate the tax burden, but instead shifts it to turnover tax.
In a letter to the editor, Aalbers said the July 17 statement issued by the Tax Administration correctly clarified that registered residents of St. Maarten are exempt from room tax under Article 1 of the Room Tax Ordinance (“Logeergastenbelastingverordening”), which limits the tax to guests who are not registered in the civil registry.
However, Aalbers argued that the clarification did not address the impact of turnover tax.
He said Article 8, paragraph 16 of the National Ordinance on the Tax on Business Turnovers (“Landsverordening belasting op bedrijfsomzetten”) exempts hotel room and apartment rentals from turnover tax only when room tax has been paid on that revenue.
According to Aalbers, because resident guests do not pay room tax, the revenue generated from their stays also falls outside the turnover tax exemption. As a result, hotel operators owe five per cent turnover tax on that revenue.
Aalbers noted that room tax is also equivalent to five per cent of the room price, meaning the exemption effectively shifts the same tax from one ordinance to another.
He explained that there is an important difference between the two taxes. Room tax is paid by the guest and collected by the accommodation provider, while turnover tax is levied on the operator’s own revenue. He said a hotel that stops charging room tax to residents without adjusting its rates would have to absorb the turnover tax itself.
Aalbers also raised practical questions for the accommodation sector, including how staycation packages should be invoiced and what proof of residency should be retained for future audits.
He welcomed the Tax Administration’s efforts to educate the public and said further guidance addressing the turnover tax implications for resident stays “would complete the picture and would be of real help to the accommodation sector.”
