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Details

  • Service: Tax, Global Indirect Tax
  • Type: Regulatory update
  • Date: 6/1/2013

Venezuela: VAT essentials 

Essential information regarding VAT as it applies in Venezuela.


Scope and Rates

What supplies are liable to VAT?


Value-added tax (VAT) is due on any supply of goods (except to real estate goods) or services made in the country. Supply includes all forms of supply. It is not restricted to the provision of goods and services by way of sale but can apply equally to other forms of transaction.


Supply does not include anything not done for consideration. However, certain actions carried out without consideration are deemed to be supplies as a self-consumption; for example business gifts and private use of business assets.


What is the standard rate of VAT?


The standard rate applicable is 12 percent.


The VAT rate will be adjusted on an annual basis with the budget law (Ley Presupuesto Anual). The yearly adjusted VAT rate must range between 8 percent and 16.5 percent


Are there any reduced rates, zero rates, or exemptions?


Zero Rates (with deduction right)


  • exportation of goods and services are zero rated.
  • sales of natural hydrocarbons performed from joint-ventures companies (empresas mixtas) to Petróleos de Venezuela, S.A. or any of its subsidiaries

Reduced Rate


Certain goods and services (such as red meat, animal oil, or domestic plane tickets), have temporary rate of 8 percent, until the budget law provides a different rate.


Increased Rate


An increased rate of 10 percent (additional ten percentage points above the general rate) applies on luxury goods.


Exemptions


  • national transportation services of people, except from air travel tickets
  • intangible assets
  • loans
  • banks and financial institutions operations except by leasing
  • insurance services
  • payroll
  • operations performed on duty free and tourist areas, such as Peninsula de Paraguaná, Mérida, Sta. Elena de Uairén, and Atuja
  • basic food elements, described on article 18 of the Law and its transportation. (Exceptions apply)
  • medicine
  • fertilizer
  • fuel
  • newspapers, books, magazines, and the paper to edit them
  • education
  • home electricity, water, natural gas.

What are the other local indirect taxes beside VAT?


Venezuelan Entities


Businesses making sales of taxable supplies in Venezuela are required to file VAT returns, but no additional registration will be required.


Foreign Entities


Foreign entities are not required to assess VAT. In cases of import of goods and services the buyer is responsible for payment of VAT.

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Registration

Who is required to register for Venezuelan VAT?


Venezuelan Entities


Businesses making sales of taxable supplies in Venezuela are required to file VAT returns, but no additional registration will be required.


Foreign Entities


Foreign entities are not required to assess VAT. In cases of import of goods and services the buyer is responsible for payment of VAT.


Are there penalties for not registering or late registration?


N/A.


Is voluntary VAT registration possible for an overseas company?


Not applicable, due to there is no specific registration for VAT purposes.


Are there any simplifications that could avoid the need for an overseas company to register for VAT?


N/A.


Does an overseas company need to appoint a fiscal representative?


No, since the buyer is responsible for the payment of VAT due on import of goods and services.

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VAT grouping

Is VAT grouping possible?


No, each taxpayer pays it owns taxes, and there is no opportunity to offset credits and debits between taxpayers.


Can an overseas company be included in a VAT group?


N/A.

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Returns

How frequently are VAT returns submitted?


Local taxpayers are required to submit VAT returns on a monthly basis.


Are there any other returns that need to be submitted?


Withholding VAT returns must be filed every 15 days, that is twice a month.


If a business receives a purchase invoice in foreign currency, which exchange rate should be used for VAT reporting purposes? (e.g. central bank’s exchange rate applicable on the date of the invoice)


Taxpayers must use the official exchange rate (VEF6,30/1USD at present) which is provided by the Central Bank of Venezuela.

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VAT recovery

Can a business recover VAT if it is not registered?


No, only local taxpayers are allowed to recover VAT.


Does your country apply reciprocity rules for reclaims submitted by non-established businesses?


Information not available.


Are there any items that businesses cannot recover VAT on?


VAT exemptions do not allow VAT recovery, the amount paid as VAT becomes part of expenses and cost.


Non-VAT taxpayers are not able to recover VAT.

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International Supplies of Goods and Services

How are exports of goods and services treated?


Exports are subject to VAT at the 0 percent rate with the exporter being allowed to recover any VAT paid in order to produce or buy the goods or services exported


How are goods dealt with on importation?


When goods are imported into Venezuela, VAT and customs duties are due. They have to be paid or secured before the goods will be released from customs’ control. The VAT paid can be offset against the VAT charged by the acquirer on its VAT taxable operations, on its VAT return.


How are services which are brought in from abroad treated for VAT purposes?


In case of services, once the invoice is recorded in the accounting books, the VAT should be paid and can be offset against the VAT charged by the acquirer on its VAT taxable operations, on its VAT return.


Additionally, the acquirer has to issue an invoice as partly responsible for the VAT generated by the import of services.

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Invoices

Is a business required to issue tax invoices?


Yes


What do businesses have to show on a tax invoice?


  • the document must clearly establish if it is an invoice, credit note or other document
  • a sequential invoice number
  • a sequential tax control number (Número de Control)
  • total control number assigned to the company
  • invoices must be printed with at least one copy
  • ithe name, address, and registration number of the supplier
  • tax registration numbers RIF
  • the name, address, and registration number of the authorized printer, as well as the number of the printer’s tax authorization
  • tax address of the head office in cases of permanent establishment
  • the date of issue of the document (DD/MM/YYY)
  • the name and address of the customer
  • tax registration numbers RIF of the costumer
  • the date of issue of the document related to good delivery if such was made prior to the invoice date
  • the quantity and nature of the goods/services supplied at each VAT rate
  • indication of any amount that is charged to the sale price (interest)
  • indication of applicable discounts
  • total sales price taxed
  • the total amount of VAT payable
  • if the seller is not a VAT tax payer, the document must state, that no tax credit will be derived in that sale
  • if the sale is invoiced in the name of a third party, it must clearly be indicated in the invoices.

Can businesses issue invoices electronically?


Yes. Invoices and equivalent documents may be issued electronically in two ways: printing forms acquired from authorized printer or using a tax computer. Operators in telecommunications industry are authorized to send electronic invoices.


In addition, this can be done through secured hardware that cannot be accessed by anyone but the tax authorities.


Is it possible to operate self-billing?


No.


Can a business issue VAT invoices denominated in a foreign currency?


Yes, but it should also shows the amount and taxes in local currency as well as the exchange rate use for conversion, payment in foreign currency could not be requested within the country

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Transfers of Business

Is there a relief from VAT for the sale of a business as a going concern?


No, even in cases of liquidation, VAT would be applied on the assets returned to shareholders. The only case not subject to VAT is the contribution of assets to a newly entity that will carry on the same type of business

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Options to Tax

Are there any options to tax transactions?


Real estate leases are taxed if they are used for commercial purposes.

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Head Office and Branch transactions

How are transactions between head office and branch treated?


A charge related to services rendered by head office to its branch or vice versa is not treated as a supply for Venezuelan VAT purposes, as both the head office and its branch are considered the same entity.

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Bad Debt

Are businesses able to claim relief for bad debts?


No relief for bad debts is established by law, even though most of the companies claim them when they have all the supporting documentation. Another procedure applied by business is to issue a credit note against the invoices, to reverse VAT debits.

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Anti-Avoidance

Is there a general anti-avoidance provision under VAT law?


There is a general anti-avoidance provision under the Venezuelan Organic Tax Code. In addition, VAT has its own rules.

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Penalty Regime

What is the penalty and interest regime like?


There are certain penalties for failing to fulfill formal obligations such as late or non filing of returns, lat payments etc.

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Tax authorities

Tax audits


How often do tax audits take place?


VAT audits take place often, several times a year.


Are there audits done electronically in your country (e-audit)? If so, what system is in use?


No


Advance rulings and decisions from the tax authority


Is it possible to apply for formal or informal advance rulings from the (indirect) tax authority?


Formal rulings are in force only when they comply with all the legal requirements. Tax rulings should never be applied retroactively


Are rulings and decisions issued by the tax authorities publicly available in your country?


Yes, the link to the tax authorities is: www.seniat.gov.ve.

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Miscellaneous

In your country, are there unique specific indirect tax rules (regimes) that differ from standard indirect tax rules in other jurisdictions?


In general terms VAT legislation in Venezuela has no other specific rules than specified above. Financial institutions (banks) charge VAT only on leasing operations (not very common in Venezuela). As unique rule, special taxpayers are required to withhold the 75% of the VAT invoiced to them.


Are there indirect tax incentives available in your country (e.g. reduced rates, tax holidays)?


Certain tax exemptions or relieves apply according to the VAT Law. Zero and reduced rates apply as explained above.

 

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