Venezuela

Corporate - Significant developments

Last reviewed - 04 August 2021

    Amendment of Value Added Tax (VAT) Law

    Constituent Decree published in the Extraordinary Official Gazette N° 6,507 of the Bolivarian Republic of Venezuela, dated 29 January 2020, partially amended the Decree with Range, Value, and Force of Law that establishes the VAT.

    Main changes to the amended Decree, dated 21 August 2018, are comprised by the following:

    • Introduction of an additional tax rate, subject to modification by the National Executive and ranging from 5% to 25%, applicable to goods and supply of services paid in foreign currency, cryptocurrency, or crypto assets different from those issued or guaranteed by the Bolivarian Republic of Venezuela.
    • The aforesaid additional rate is to be established by the National Executive by Decree and will be applicable if (i) the sale of movable property or supply of services taking place in the national territory, including tax exempt transactions, is paid in foreign currency, cryptocurrency, or crypto assets different from those issued or guaranteed by the Bolivarian Republic of Venezuela and (ii) sales of immovable property are paid in foreign currency, cryptocurrency, or crypto assets different from those issued or guaranteed by the Bolivarian Republic of Venezuela.

    The Constituent Decree entered into effect on March 29, 2020  whereas the newly introduced additional tax rate will be effective as of 30 continuous days following the publication of the Official Gazette by which the National Executive is to establish the applicable rate. To date, the additional tax rate has not been published yet.

    In addition, as of September 2020, the special taxpayers' calendar was modified. VAT filing and payment was changed from a weekly to a bi-weekly basis.

    National harmonisation agreement of Municipal taxes

    On July 7th, 2020, the Constitutional Chamber of the Venezuelan Supreme Court published the Sentence N° 0078, in which -the Chamber- ordered to the Sectorial Vice President of the Economic Area and the Minister of Industries and Production to conform, along with the States Governors and Municipalities Mayors, a technical group with the purpose of harmonise, all over the country, the Municipal and State collection taxes, and their rates.

    Afterwards, on July 29th, 2020, three-hundred and eight (308) Mayors -abiding the ruling of the Constitutional Chamber- signed the “National Harmonisation Agreement of Municipal Taxes”, on which the following points were agreed:

    ·       The implementation of a unique “Classifier of Economic, Industry, Commerce and Similar Activities”, applicable for the calculation of the Municipal Business Licence Tax.

    ·       The creation of a “Single Registry of Municipal Taxpayers”.

    ·       The use of the sovereign crypto-asset “PETRO (₽)” as a unit of account for the tax and penalties’ calculation.

    ·       The implementation of a “Table of Construction and Land’s Values”, applicable for cadastral appraisals, cadastral registration, construction permits, occupational certificates, and for the calculation of the Urban Property Tax.

    The “National Harmonization Agreement of Municipal Taxes”, was approved by the Constitutional Chamber on August 18th, 2020. Municipalities that adhered to the agreement are taking actions to adapt their tax-related Ordinances to the Agreement’s standards.