Venezuela’s Income Tax: Key Concepts & Rules
Venezuela’s Income Tax: Key Concepts
Who are Taxpayers? (ART 1)
Any individual or entity domiciled in the Republic, regardless of whether the source of income is within or outside the country.
Taxable Events (ART 3)
Sales and imports of goods and services.
Net Income (ART 4)
The sum of all taxable income minus the cost of borrowing and deductions allowed by law.
Contributor (RULE 5)
The taxpayer who is obliged to charge VAT.
Types of Contributors (RULE 7)
- Individuals
- Anonymous Companies (SA)
- Limited Liability Companies (SRL)
- General Partnerships and Limited Partnerships
- Micro-enterprises
- Associations, Foundations, Corporations
Individuals – Rate 1 (ART 8)
Individuals and taxpayers pay tax on their net enrichment, as provided under Art 50.
Companies – Rate 2 (RULE 9)
Public companies and taxpayers treated as such, as per Art 11 and based on Art 52.
Gross Income Determination (Art 16)
This refers to Art ISLR 7. It is determined by the amount of sales of goods and services in general.
Gross Income (ART 21)
Income from the sale of goods and services in general, and any other economic activity. It is determined by subtracting from gross revenue.
Tax Base (ART 20 and 23)
The price at which goods or services are sold, and on which the tax is calculated.
Tax Rate (ART 27)
The percentage charged for any operation.
Tax Revenue (ART 28)
The result of applying the tax rate to the tax base, summing all sales or services rendered during the month.
Personal Reliefs (ART 59)
Payments to:
- Educational institutions in the country
- Insurance premiums to companies (HCM)
- Loans for house purchases
- Dentistry
Single Deduction (ART 60)
Individuals residing in the country may opt for a single deduction equivalent to 774 tax units, without needing to submit justification.
Tax Rebate (Art 61)
Individuals residing in the country enjoy a tax rebate of ten tax units (10 UT).
Declaration Requirement (ART 79)
Individuals residing in the country who obtain a total annual net enrichment over 1000 UT or gross income over 1500 UT must file a sworn statement.
Reliefs
Amounts allowed by law to be deducted from the net enrichment earned during the fiscal year by natural persons residing in the country. The result after applying the reduction is the basis for implementing the legally prescribed fee.
General Principles of Income Tax
Principles of annual net enrichment, absorbed and available services or equipment, and taxes for married couples, are established under specific rules.
Detailed Deductions
Allows deductions for four different concepts (some with limits), requiring proof for the deduction to be valid.
Who is Required to Declare and Pay ISLR?
- All persons and unclaimed estates treated as such, who have obtained during the fiscal year a net enrichment greater than one thousand tax units (1,000 TU) or gross income greater than one thousand five hundred tax units (1,500 TU).
- Individuals who have obtained gross income greater than two thousand six hundred twenty-five tax units (2,625 TU).
- Individuals with a fixed base in the country.
- All legal entities (companies), including those engaged in mining and hydrocarbons.
What is the Gross Domestic Product?
The total monetary value of the current production of goods and services of a country during a period (usually a quarter or a year).
Value of UT
(Note: The provided value is outdated. The user should verify the current value.) As of March 31, 2010, the value of the tax unit was Bsf. 55.00. See: http://www.venelogia.com/archivos/2697/
Debit Tax
The Value Added Tax (VAT) recorded on invoices, settlements, debit notes, and credit notes issued for sales and services provided in the respective tax period.
Required Data for the Purchase Book
Transitions should be incorporated into the book, including salary and wages.
Declaration Deadline
The statement must be filed within three months of the fiscal year-end, except for taxpayers with a special calendar.