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Tax Guide Venezuela

Tax Guide Venezuela

Taxation in Venezuela

For individuals resident in Venezuela, worldwide basis of taxation is used. This implies that both, income sourced from within Venezuela, as well as income sourced outside of Venezuela is used for taxation related purposes. For foreign residents with a fixed base in Venezuela, income taxes must be paid on income of national, or foreign sourced income to the given base. On the other hand, non-resident individuals are required to pay taxes on all income that has been sourced from within the periphery of Venezuela.

Personal Income Tax Rates in Venezuela

For all resident individuals in Venezuela, personal income taxation is calculated using the following rates:

  • For taxable income between 0 TU (Tax Units) and 1000 TU (Tax Units): The applicable tax rate is 6%.
  • For taxable income between 1000 TU (Tax Units) and 1500 TU (Tax Units): The applicable tax rate is 9%. Furthermore, 30 TUs are eligible for deduction.
  • For taxable income between 1500 TU (Tax Units) and 2000 TU (Tax Units): The applicable tax rate is 12%. Furthermore, 75 TUs are eligible for deduction.
  • For taxable income between 2000 TU (Tax Units) and 2500 TU (Tax Units): The applicable tax rate is 16%. Furthermore, 155 TUs are eligible for deduction.
  • For taxable income between 2500 TU (Tax Units) and 3000 TU (Tax Units): The applicable tax rate is 20%. Furthermore, 255 TUs are eligible for deduction.
  • For taxable income between 3000 TU (Tax Units) and 4000 TU (Tax Units): The applicable tax rate is 24%. Furthermore, 375 TUs are eligible for deduction.
  • For taxable income between 4000 TU (Tax Units) and 6000 TU (Tax Units): The applicable tax rate is 29%. Furthermore, 575 TUs are eligible for deduction.
  • For taxable income higher than 6000 TU (Tax Units): The applicable tax rate is 34%. Furthermore, 875 TUs are eligible for deduction.

As far income earned by non-residents is concerned, all income arising from non-business professional activities are subject to tax at a rate of 34%.

Corporate Income Taxation in Venezuela

Business entities in Venezuela are subject to taxation on both, income sourced within Venezuela, as well as income sourced outside Venezuela. On the other hand, corporations that have a Permanent Establishment in Venezuela are supposed to pay taxes on income sourced from within Venezuela. All taxes that are paid to foreign countries can be claimed as tax credits in Venezuela.

Corporate Income Tax Rates in Venezuela

The following CIT rates are levied on corporate income in Venezuela:

  • For a taxable income between 0 TU (Tax Units) and 2000 TU (Tax Units): The applicable tax rate is 15%.
  • For a taxable income between 2000 TU (Tax Units) and 3000 TU (Tax Units): The applicable tax rate is 22%. However, it is eligible to deduct 140 TU for purposes of CIT calculation.
  • For a taxable income higher than 3000 TU (Tax Units): The applicable tax rate is 34%. The allowable deduction for this income slab is 500 TU (Tax Units)

Additional CIT Considerations: All income that is earned from oil exploration (and related projects) are taxed at a flat rate of 50%. In the same manner, income earned by banks and other financial corporations are taxed at a rate of 40%.

Other Taxation in Venezuela

  • Value Added Tax (VAT): VAT is applied as a consumption tax in Venezuela across almost all goods and services. It varies within range of 8% or 16.5%. However, there are a couple of goods and services that are altogether exempted from VAT. Examples include basic food supplies (staples), as well as educational services. Exports and other industries related to exports are also zero-rated when it comes to VAT.
  • Custom Duties: Custom Duties are levied on imported goods and services at rates varying from 5% to 35%. Import tariff for imported goods is equivalent to 5%. Similarly, a rate varying from 10% to 15% is levied for raw materials and intermediate goods. Lastly, for finished goods, custom duties are levied between 15% and 35%.
  • Excise Taxes: Excise Taxes are levied on products classified as luxury products, like alcohol and tobacco. For alcohol, excise duty ranges from 15% to 50%. For tobacco, excise duties are levied proportionally at a rate of 70%.
  • Public Registration Tax: This is levied across all commercial companies. The levy is equivalent to 1% of the subscribed amounts or increased capital.
  • District Capital Stamp Tax: District Capital Stamp Tax is levied on increased capital of companies at a rate of 2%.

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