Corporations resident in Venezuela are subject to corporate income tax (CIT) on their Venezuelan and foreign-source income, whereas corporations resident abroad with a permanent establishment (PE) in Venezuela are levied CIT on only their Venezuelan and foreign-source income attributable to said PE. Corporations are able to claim any similar taxes paid abroad on foreign-source income as a tax credit. Non-resident corporations without a PE are subject to CIT only on Venezuela-source income.
Corporate income is taxed at the following progressive rates based on tax units (TU) (see below) (i.e. Tariff 2):
|Taxable income (TU)||Rate (%)||Subtract (TU)|
Tax units (TU)
The 1994 Income Tax Law reform established the concept of a taxable unit as an element that reduces the negative effects created by inflation on the determination of the tax rates. The tax code established the initial TU at VEF 1, with annual basis adjustments according to the variation on the Consumer Price Index (CPI) from the previous year. This parameter for adjustment has been abrogated in the new Master Tax Code. For 2019, the TU was 50 bolívar soberano (VES). For 2020, the TU published value is VES 1,500.
Additional rates and considerations
Income for oil exploitation and certain related activities is taxed at a flat rate of 50%. Related activities are comprised of those such as refinery, transportation, and purchases for the exports of hydrocarbons and by-products for exploitation. Joint venture corporations are also subject to a 50% CIT rate.
The above-indicated regime does not apply to corporations engaged in the exploration and exploitation of non-associated gas (and the processing, refining, transportation, distribution, commercialisation, and exportation of the gas and its components) or companies exclusively engaged in the refining of hydrocarbons or improvement of extra heavy oil, which are subject to Tariff 2.
Net income from banking, financial, insurance, and re-insurance activities carried out by entities domiciled in Venezuela is subject to a 40% flat rate.
Local income taxes
See Municipal business licence tax in the Other taxes section for a description of local taxes on income.