Venezuela

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

In Venezuela, the system of levy is expressed in tax units that specify tax rates. Since February 2004, the value of a tax unit is 27,400 VEB. There are 3 brackets of taxation:
- from 0 to 2,000 tax units: 15%
- from 2,000 to 3,000 tax units: 22%
- beyond 3,000 tax units: 34%.
Petroleum companies and income from petroleum-related activities are taxed at a rate of 50%. Mining royalties and transfers of such royalties are subject to tax at a rate of 60%.

   
Tax rate on long-term capital gains The levy of capital gains is included in the corporate tax.
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies Dividends are generally taxed in Venezuela at the rate of 34% (50% for oil companies and 60% for mining companies).
   
Tax rate on branches Foreign branches are taxed on profits made in Venezuela as other companies with the same brackets of taxation.




Income tax

Fiscal year The fiscal year begins on January 1-st and ends on December 31 of the same year.
   
Income tax rate Income of resident individuals expressed in tributary units is subjected to tax at the following rates. Since February 2004, the value of a tax unit is 27,400 VEB:
- up to 1,000 units: 6%
- 1,001 to 1,500 units: 9%
- 1,501 to 2,000 units: 12%
- 2,001 to 2,500 units: 16%
- 2,501 to 3,000 units: 20%
- 3,001 to 4,000 units: 24%
- 4,001 to 6,000 units: 29%
- beyond 6,000 units: 34%.
   
Tax deductions or other allowances Legal deductions include the following:
- school tuition and costs for dependants younger than age 25,
- health-insurance premiums,
- medical, dental and hospitalisation costs,
- interest on loans for housing purchase or expansion up to 1,000 units,
- house payment or rental costs up to 800 units per year.
A standard deduction of 774 units may be taken.
Each taxpayer may also deduct 10 units per person and per child.



VAT rates

Standard rates The VAT rate passed from 14% to 11% on March 1st, 2007 and will be at 9% on July 1st, 2007.
An additional 10% is charged on certain luxury goods, including high-value vehicles and jewellery.
   
Reduced rates Between 8% and 10%
Are exempted exports, services of banks, financial institutions and leasing companies, insurance services, the sale of shares and bonds, domestic passenger transport, basic foodstuffs, farming machinery, ships and some education and health services.



Other important taxes


Name of tax
Rate
Municipal tax
(municipal Impuesto)  
Variable rate according to the place of implanting of the company and its activity.  
Other taxes  
 


 

Accounting

Introduction
The accounting practice in Venezuela refers to the American model with some small differences.


General accounting principles
There is no obligation for the presentation of the accounting information. These information published must be clear, understandable and reliable.

Obligations and publications
All commercial companies of Venezuela have to establish some accounting documents:
- The account book
- The stocking account
- The account of expenditures analysis
- The stocking evolution.
To realize a financial analysis, companies have to make out a balance sheet and a profit and loss account which will be controlled and reported to the "Commercial Court" by an independent auditor. The delay of presentation of documents to the Commercial Court is 10 days from the date of the shareholders meeting.

Certification and auditing
The balance sheet and the profit and loss account made out by the company must be controlled by an auditor (comisario) appointed by the shareholders. This auditor will have the responsibility to determine if the accounting of the company is in accordance with the current laws. Then, he has to report the results of the audit to the shareholders during the annual meeting.

Professionals and representative organizations
The "Federacion de Colegios de Contadores Publicos de Venezuela".



Useful links
the Fiscal administration in Venezuela (in Spanish)

Last modified in January 2007
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