PHILIPSBURG – Foundations that are not operating like a business have now been exempted from paying taxes.
Minister of Finance Richard Gibson disclosed Wednesday, August 17, at the Council of Ministers press briefing that the change was made due to the fact that some foundations do not function as a business and actually benefit the St. Maarten community.
“Parliament passed a law that had some undesirable consequences as far as foundations are concerned. It resulted in all foundations having to file taxes and to do so hiring accountants to do so properly. The undesired consequences is that foundations really perform services for the general public…they do good work for the community and fill in in areas that help with the social development of the country,” Gibson said during the Council of Ministers press briefing.
“It was never the intention when we passed the law last year in Parliament, to burden foundations with these tax consequences by filing and paying taxes. Yesterday, the Council of Ministers, we corrected that situation that was caused last year and we have now exempted foundations who are not involved in the operation of a business,” he explained.
Minister Gibson explained the reason why some foundations will end up paying taxes. “Some foundations and associations in the course of those activities, for instance operate a business. For example if you have an association that is looking after its medical welfare for its members and in the course of it decides we are going to open a drugstore and that drugstore then sells drugstore products not only to the members, but to the public at large, that’s a business. In that case that foundation will have to be treated as far as the operation as a business because it is operating as a business,” Gibson explained.