How to Structure an Aruban Marketplace to Avoid BBO Double Taxation

If you operate a marketplace or platform business in Aruba, the turnover tax — known as BBO, together with its surcharges BAVP and BAZV — is one of the most consequential structural decisions you will face. Unlike VAT systems with input credits, BBO is a cascading tax: every transaction in the chain is taxed independently, with no mechanism to deduct what was already paid upstream. Get the structure wrong, and you pay the tax twice on the same economic value.

The problem: cascading turnover tax with no input credit

Aruba levies a combined turnover tax of [VERIFY: 7% — confirm current combined BBO/BAVP/BAZV rate] on the delivery of goods and services. Critically, this is not a value-added tax. There is no input credit mechanism. If a supplier charges BBO on a sale to your marketplace, and your marketplace then charges BBO on the sale to the end customer, the tax is paid twice on the same underlying product or service.

For a traditional retailer buying and reselling goods, the cascading effect is a known cost of doing business — and is typically absorbed in margin calculations. But for a marketplace or platform that connects buyers and sellers without taking ownership of the goods, the cascading effect is both economically irrational and structurally avoidable.

Why this matters more for marketplaces

Consider a simple example. A local artisan sells a product for AWG 100 through your marketplace platform. In a naively structured marketplace:

1. The artisan sells to your marketplace entity for AWG 100 + [VERIFY: 7%] BBO = AWG 107.
2. Your marketplace sells to the end customer for AWG 120 + [VERIFY: 7%] BBO = AWG 128.40.
3. Total BBO paid: AWG 7 (artisan → marketplace) + AWG 8.40 (marketplace → customer) = AWG 15.40.
4. BBO as a percentage of the actual end-customer price: 12.8% — nearly double the nominal rate.

The marketplace added AWG 20 of value (its commission), but BBO was levied on the full AWG 120, not just the margin. The AWG 100 of product value was taxed twice.

The fix: the agency model

The structural solution is to ensure your marketplace operates as an agent, not a principal. In an agency model, the marketplace facilitates the transaction between the seller and the buyer but never takes title to the goods or services. The legal sale is directly from the seller to the buyer — the marketplace simply earns a commission for facilitating it.

Under this structure:

1. The artisan sells directly to the end customer for AWG 100 + [VERIFY: 7%] BBO = AWG 107.
2. The marketplace charges the artisan a commission of AWG 20 + [VERIFY: 7%] BBO = AWG 21.40.
3. Total BBO paid: AWG 7 (on the product) + AWG 1.40 (on the commission) = AWG 8.40.

The saving is significant: AWG 8.40 in total BBO versus AWG 15.40 under the principal model — a 45% reduction in turnover tax, achieved purely through correct legal structuring. No aggressive tax planning required; this is simply matching the legal form to the economic reality.

How to implement the agency model correctly

The agency model is not just a label you apply to your invoices. To withstand scrutiny from DIMP (the Aruban tax authority), the agency relationship must be real and documented:

• Contractual framework: Your terms of service and seller agreements must clearly establish that the marketplace acts as agent. The seller remains the supplier of the goods or services; the marketplace earns a commission for facilitating the transaction.
• Payment flow: Ideally, the customer payment flows through to the seller (minus the commission), rather than the marketplace collecting the full price and remitting the balance. If the marketplace does collect and hold funds, the bookkeeping must reflect that these are held on behalf of the seller.
• Invoicing: The sales invoice to the customer should be in the seller's name (or clearly indicate the seller as the principal), with the marketplace's commission invoiced separately to the seller.
• Risk and title: The marketplace should not bear inventory risk, warranty obligations, or product liability that would indicate principal status. Returns and complaints should be the seller's responsibility.

Comparison: principal vs. agency model

The 2026 Start-up Tax Incentive Regime

If you are building a new marketplace in Aruba, there is a second opportunity worth knowing about. The Aruban government introduced the Start-up Tax Incentive Regime [VERIFY: confirm official name, effective date, and legislative reference] to encourage new business formation and innovation.

Under this regime, qualifying start-ups may benefit from [VERIFY: reduced profit tax rates, BBO exemptions, or other incentives — confirm the specific benefits and eligibility criteria]. The regime is aimed at businesses that are genuinely new (not restructured existing businesses), and typically has requirements around innovation, job creation, or economic contribution to the island.

For a marketplace that qualifies, the combination of the agency model (avoiding BBO cascading) and the start-up incentive (reducing profit tax and potentially BBO on the commission itself) can make Aruba an exceptionally efficient jurisdiction for platform businesses serving international markets.

Getting the structure right from day one

Restructuring a marketplace from principal to agency after launch is possible but painful — it involves changing terms of service, reworking contracts with sellers, adjusting payment flows, and potentially amending prior BBO filings. Far better to get it right from the start.

If you are launching or operating a marketplace in Aruba, we can help you evaluate the optimal structure, implement the agency model correctly, and — if applicable — apply for the Start-up Tax Incentive Regime. Reach out for a no-obligation conversation about your specific situation.