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Moving to Bonaire: Residence Permit Necessary?
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Residence Permit Necessary?
| By Vince DePietro (Experienced BonaireTalker - Post #103) on Saturday, October 15, 2005 - 11:50 am: |
First the good news, after visiting Bonaire for the last 20 years we finally bought a condo which is to be built in Belnem. They have not yet broken ground, but estimated date of completion is June 2007. So we've got plenty of time!
I do NOT plan on engaging in any gainful employment while on Island.
We'd like to stay for approx 4 months a year.
So, with that background:
1. Would we need a residency permit since the stay exceeds 90 days?
2. If so, once I receive same, how long is it good for? Would we have to go through this process every year or once you have it it's good for life?
3. Any Bonaire income tax ramifications on a residency permit given the aforementioned scenario?
| By Tish (Experienced BonaireTalker - Post #419) on Saturday, October 15, 2005 - 1:49 pm: |
If you get a Bonaire residency permit, you must pay taxes on your worldwide income to Bonaire as well as to your country of citizenship. The tax rates here are extremely high unless you have a low income. If you bought a very expensive condo, you might qualify for a reduced tax rate. Otherwise, do whatever you are required to do to avoid becoming a resident.
You must reapply every year for the residency permit.
I cannot give you a definitive answer about the four months. If you split it into two visits, you should be okay. The rules keep changing or being reinterpreted, and it might depend on which person at Immigration you ask.
You can learn a lot about residency on Bonaire from the Sunbelt Realty web site, which you can reach through infobonaire.com
To complicate things, your condo will be completed one month before the Netherlands Antilles ceases to exist. What the rules will be after that is anybody's guess. But be warned, there is a strong likelihood that Bonaire will use the Euro then, thus reducing the buying power of Americans' incomes.
| By Vince DePietro (Experienced BonaireTalker - Post #104) on Saturday, October 15, 2005 - 3:51 pm: |
Thanks Tish..Well I have this idiosyncracy in that I don't like to pay income taxes (I don't like to pay in the U.S., never mind in Bonaire). So unless there's a reciprocal tax agreement in effect between U.S. & Bonaire it certainly appears that there can be no benefit derived from a residence permit (bearing in mind that MAXIMIM I plan on being on Island is 4 months at one time). If anyone has any info on this, let me know but I suspect none exist.
If I planned to live there full time, I guess that's a different story. So it appears that I should do everything possible to retain my tourist status.
Perhaps I'd do better off to drink a cup of coffee with the governor if I wanted to stay longer then 90 days as I was advised from another source!
With respect to the possible transition to the Euro, currently this is a stronger currency than the $, however who knows what the relationship will be in 2007. If the transition were done today, I would assume that the changeover would be at the current exchange rate so if a service were priced in Euros it would be approx 15% cheaper than it's past price in $$. Make sense? But I'm certainly no expert in this area.
| By Tish (Experienced BonaireTalker - Post #421) on Saturday, October 15, 2005 - 5:47 pm: |
The dollar dropped 30% against the Euro. Recently the dollar has risen some, so a few days ago it was down only 20% against the Euro. (I don't check this every day.) This suggests you must spend MORE money than you would if the prices remained in dollars.
If you are charged 100 Euros for a hotel room, the room would cost you $120.
Of course, if everybody lowered their prices, that would be swell, but I sorta doubt that's gonna happen. But we can dream, huh?
You should compare the price you have paid for your condo to the minimum price required in order to qualify for pensionado status. If you qualify, by all means apply for residency.
| By janvanderlist (New BonaireTalk Poster - Post #1) on Thursday, October 20, 2005 - 8:24 pm: |
Hi Vince and Tish
Tish I think I will have to make an adjustment to your comment regarding tax consequenses after becoming a resident. Just getting a residency permit does not automatically mean that you will be taxable for your worldincome on Bonaire. I always try to explain this by saying that we have two kinds of residents, the tourist resident and (like yourself) the real resident. The tourist resident shows up couple of times a year to enjoy Bonaire and the real resident lives on Bonaire basically throughout the yea and leaves couple of weeks a year to visit the states or go on vacation. The tourist resident wants the plastic card so he can import duty free (used) household stuff for his condo and maybe a car. Plus he likes beiing seen at the airport at the local resident gate entering Bonaire.
And yes there is a special provision for the real residents which under certain conditions are just taxable with a 10% flat rate. But for more detailed information you could consult the tax office or a tax consultant.
| By Vince DePietro (Experienced BonaireTalker - Post #110) on Friday, October 21, 2005 - 5:52 am: |
Jan...Well that makes more sense & is much more tourist friendly... In my case, the only reason I'd want to be a resident (as you indicate tourist) is to stay a bit longer on the island than 90 days to spend the winter season there. In the course of doing this, I certainly do NOT want to increase my income tax burden ( I pay enough in the U.S. thank you very much) by 10% or even 1 %. Such a situation would then make no financial sense. Obviously my goal is to decrease taxes, not increase them. I'll gladly pay property taxes on Bonaire but NO WAY will I pay income taxes on $$ which were completely generated within the U.S.
Is there an on line site where I can get this info? Appreciate your input!
| By janvanderlist (New BonaireTalk Poster - Post #2) on Monday, October 24, 2005 - 8:30 am: |
I don't think there is an online site for this information. At least not that I am aware of.
| By Jim Wagner (BonaireTalker - Post #11) on Friday, January 13, 2006 - 6:58 pm: |
Hi it's Jim from Massachusetts. I am in a similar position as you as I am buying a lot this month and plan on building after the planned dissolution of the Netherlands Antilles.
How many months I spend in Bonaire each year will also depend on the currency status and the tax / residency rules. I plan on visiting a tax accountant while I am on island this month. I'll let you know what I find out.
| By Tish (Experienced BonaireTalker - Post #703) on Saturday, January 14, 2006 - 5:35 am: |
You can only find out what the law says now. You can't find out what the law will say when the NA no longer exists. Very little has been determined concerning Bonaire's status and what laws will govern it beginning July 2007.
And even my opening sentence isn't entirely true. What the law says seems to depend on who you talk to and how any one person in the government interprets that law on a particular day.
| By Vince DePietro (Experienced BonaireTalker - Post #190) on Saturday, January 14, 2006 - 7:00 am: |
Hi Jim..I suspect much of what Tish says is quite accurate & the current situation will remain in a state of flux. Hopefully this will be ameliorated somewhat after the government transition. Time will tell. It's difficult to plan when you don't know what the rules are!
As I've indicated earlier in this thread, the LAST thing I want to do is increase my income tax burden. The currency differential I'm not too worried about (but I've been wrong before). There's no way to accurately judge how this will play out 18 months from now..
Stay in touch & if anyone learns anything related to this, please post the info.
| By carter farrell (BonaireTalker - Post #37) on Sunday, January 15, 2006 - 2:56 pm: |
Tish, when Bonaire is no longer a part of NA what will it be?
And...in my opinion, if Bonaire adopts the Euro the dollar will be worth less for a long time to come considering its enormous budget deficit, which is partially the result of the war. Americans will be paying for the war a long time to come and thus a cheaper dollar(this is not a political comment on the correctness of the war but a statement regarding how long a country can live on borrowed money)
| By Vince DePietro (Experienced BonaireTalker - Post #191) on Sunday, January 15, 2006 - 3:06 pm: |
Carter..I agree with you & your opinion vis-a-vis the dollar & the euro. However that certainly doesn't mean we're going to be correct!!
Case in point, 18 months ago the majority of professional money managers (& myself included)were betting that long term interest rates would rise. Well, the opposite occurred. And in this camp was one of the most savy/astute investors of all time, the "Oracle of Omaha".. Warren lost a lot of $$ betting AGAINST the greenback. So we can all have our opinions but to really be accurate a crystal ball is required (and I don't have one).
| By Tish (Experienced BonaireTalker - Post #713) on Sunday, January 15, 2006 - 3:07 pm: |
Carter, you should post your questions and comments about the Euro under the "local" topic on BT. And check out the comments already made in various local threads.
The NA will cease to exist roughly July 1st 2007.
Bonaire can't made a decision about what currency to use. We do not have the power to do that.
The NA guilder will no longer exist because the country won't exist.
We will be "a part of Holland," whatever exactly that means. We can't issue our own currency or unilaterally decide on the currency. Holland is part of the EU, so most likely we will use the Euro.
Since I live on Bonaire using a modest pension in dollars from the US, I expect the spending power of my pension to be reduced by 25% or so, keeping in mind that the reduction could be larger than that if the dollar keeps falling.
Economists expect the dollar won't rise against the Euro any time soon.
Therefore of course I would love to see Bonaire allowed to use the dollar instead of the Euro.
Thanks for your interest, Carter!
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