Individual taxpayers earning wages and salaries must file their tax returns on a calendar-year basis, whereas taxpayers engaged in commercial activities, industry activities, or services are allowed to choose a period with duration other than that of the calendar year (12-month period). Exceptions are permitted (e.g. when an individual ceases all business).
The Venezuelan income tax return should be filed by 31 March, or at the date established in the corresponding calendar in case of individuals notified by the tax authorities as major or special taxpayers. This period cannot be extended. Late filing of the return will attract fines and interests.
Spouses must, in principle, file joint returns even if they have personal income arising from their own activities. They will be considered as a single taxpayer. Husbands and wives can file separate tax returns only when the following conditions apply:
- There was a mutual agreement for separation of property.
- They both are reporting salaries, wages, and professional fees and choose to declare separately.
Payment of tax
Income tax is withheld from salaries, professional fees, royalties paid to non-residents, and certain other payments received by non-residents.
Individuals other than employees must file estimated returns only if, during the year immediately preceding fiscal year, they received income exceeding TU 1,500 from: (i) commercial or credit activities, (ii) independent professional activities, (iii) leasing or subleasing activities involving movable or real property, and (iv) participation in net profits of partnerships or communities not subject to tax payment as provided for in domestic regulations.
The estimated tax is based on 75% of the tax that would result from applying full rates to the estimated income declared (80%). The prepaid tax resulting from the estimated returns must be paid in either a single instalment or in six equal instalments.
BI-weekly income tax advanced payments apply to individuals qualified as special taxpayers not earning wages and salaries instead of the estimated tax return.
Tax audit process
According to the Master Tax Code, the tax administration is entitled to review the existence of a taxpayer’s liability, whether it has been reported or not. In exercising this power, the tax administration is entitled to obtain and verify information in connection with a determined tax liability. Verifications may be carried out on the basis of available information or on a presumptive basis if concrete information is not available
Statute of limitations
The actions to verify, inspect, determine the tax obligation, and impose the legal fines are limited to a six-year period since the action was committed. However, the statute of limitation can be extended to ten years if there was no filing or payment of the tax obligation, the taxpayer did not register before the tax authority, the goods subject to the tax obligation were taken or are out of the country, the taxpayer has duplicated or no accounting, or the fine to be imposed is a freedom-limited restriction.
The right to acquire the return of taxes has a statute of limitation of six years.
Topics of focus for tax authorities
In general terms, tax audits are mainly focused on corporate taxpayers. However, those individuals qualified by the tax authorities as special taxpayers have been subject to tax audits.