Caracas GMT - 4½
Mendoza, Delgado, Labrador & Asociados
Avenida Francisco de Miranda Centro Lido, Torre A, Piso 13 Caracas 1060
Venezuela
Indirect tax contacts
José Antonio Velazquez +58 (212) 905-6621 jose.a.velazquez@ve.ey.com
Ivette Jimenez +58 (212) 905-6753 ivette.jimenez@ve.ey.com
Damian Gomez +58 (212) 905-6788 damian.gomez@ve.ey.com
Saul Medina +58 (212) 905-6716 saul.medina@ve.ey.com
A. At a glance
Name of the tax
Value-added tax (VAT)
Local name Impuesto al Valor Agregado (IVA)
Date introduced 1 October 1993
Trading bloc membership MERCOSUR Administered by Ministry of Finance (http://www.mppef.gob.ve/) Tax Administration (SENIAT) (http://declaraciones.seniat.gob.ve)
VAT rates
Standard
16%
Other Additional rates (5%–25%); zero-rated
VAT number format
VAT return periods
Thresholds
Tax ID number (known as RIF) J-XXXXXXXX-X (numbers established by the tax administration)
Monthly for VAT ordinary taxable persons/fortnightly for special taxable persons (high level of income taxable persons)
Registration None
Recovery of VAT by non-established businesses No
B. Scope of the tax
VAT applies to the following transactions:
• The sale of tangible movable goods
• The final importation of goods
• The export of goods and services
• The provision of independent services performed or used in the country, including those com ing from abroad
The definition of “services” includes the following activities:
• Any independent activity in which an obligation “to do something” is a principal element
• The provision of water, electricity, telephone and garbage collection services
• Civil works contracts, including personal and real property
• The lease of personal and real property intended to be used for purposes other than residential use
• The assignment of use of rights included in and regulated by the laws on industrial property (patents and marks) and intellectual property (copyrights), for valuable consideration
C. Who is liable
Taxable persons are ordinary taxable persons such as habitual importers of goods, manufacturers, traders, service providers, and, in general, individuals or legal entities that as part of their busi ness activities carry out activities classified as taxable for VAT purposes.
Financial leasing companies and banks are ordinary taxable persons with respect to the portion of the tax payable on the amortization of the price of tangible movable property, excluding interest.
Recipients of imported goods and services purchased from non-domiciled persons or entities are responsible for the tax due. As the “party responsible for the tax,” the service recipient must declare and pay the VAT due on the imported goods or services. The tax paid by the recipient is treated as input tax for the responsible party and must be included in the tax return corresponding to the tax period in which the taxable event occurs.
Occasional taxable persons are non-habitual importers of tangible movable property.
Formal taxable persons are persons that exclusively carry out activities or operations that are exempt or exonerated from VAT.
Exemption from registration. The VAT law in Venezuela does not contain any provision for exemp tion from registration.
Voluntary registration and small businesses. The VAT law in Venezuela does not contain any provision for voluntary VAT registration, as there is no registration threshold (i.e., all entities that make taxable supplies are obliged to register for VAT). The only exception would be a nondomiciled entity, which is not subject to registration, but still can file for a voluntary registration. This will be applicable unless the foreign entity is conducting direct business in Venezuela and carries out VAT-taxable transactions on a permanent basis, in which case the VAT registration is mandatory.
Group registration. Group VAT registration is not allowed in Venezuela.
Non-established businesses. Entities that conduct business in Venezuela are required to register and obtain a taxable person identification number even if they are not domiciled in the country. The non-domiciled taxable persons must request a temporary taxable person ID (RIF) from the tax authority, which is issued online.
Tax representatives. Appointing a tax representative is mandatory in Venezuela. Part of the required process for becoming a VAT-registered entity is to appoint a tax representative. Tax representatives are responsible for the companies in front of the tax administration. Said repre sentatives can be directors, managers, administrators or legal representatives of the entities who will be appointed through the website of the tax administration (SENIAT).
Reverse charge. As a result of the “reverse-charge mechanism,” the obligation to self-assess the VAT is switched to the recipient of the service. The law states the tax is self-assessed by the
recipient “responsible” and “on behalf of the provider,” but the input tax belongs to the recipient (the Venezuelan entity).
Domestic reverse charge. There are no domestic reverse charges in Venezuela.
Digital economy. No specific VAT rules apply for digital economy transactions. For business-tobusiness (B2B) digital transactions, the customer is required to self-assess the corresponding VAT using the reverse-charge mechanism, only when the provider is not domiciled in Venezuela.
For business-to-consumer (B2C) digital transactions, since individual consumers are unlikely to be registered taxable persons, no VAT is anticipated. As such, non-established businesses that provided electronically supplied services (B2C) do not need to register for VAT. There are no other e-commerce rules for imported goods.
Online marketplaces and platforms. No special rules exist for online marketplace and platforms in Venezuela.
Registration procedures. Individuals, corporations and entities, domiciled or not domiciled in the country, that conduct business in Venezuela are required to obtain a taxable person identification number (RIF). Registration must be submitted online. Having an RIF is not a per se condition for being considered a taxable person.
The documents required by the tax administration for VAT registration are as follows:
• Datasheet of the tax administration (SENIAT), download from the website, which must be signed by the legal representative
• Bylaws of the company
• Identification of the legal representative and the document that proves their capacity
• Receipt of any public service or document that proves the fiscal address
The registration of the information should be online through the website of SENIAT, however, the formalization of the registry is required to be in person to file the documents and that the tax administration can validate the information provided in the datasheet.
Deregistration. This occurs upon notification to the tax administration. This applies when taxable persons are liquidated or merged within another entity, in which cases the taxable person ID of the entity that is absorbed or eliminated shall be deregistered.
Changes to VAT registration details. Taxable persons have the obligation to inform the tax admin istration, within a maximum period of one month of the event, the following events:
• Change of directors, administrators, reason or social denomination of the entity
• Change of fiscal domicile
• Change of the main activity
• Cessation, suspension or halt of the habitual economic activity of the taxable person
The change of any information should be made online and must be formalized in person with the file of the notification before the tax administration.
Withholding of VAT. The tax administration in Venezuela (SENIAT) has designated taxable per sons qualified as “special taxable persons” as the persons responsible for the payment of VAT in their capacity as withholding agents. Special taxable persons must serve as withholding agents of the VAT generated by the purchase of personal property or the provision of services provided by suppliers who are ordinary taxable persons.
The term “special taxable persons” is a category created by the tax administration referred to specific taxable persons that due to their high level of income or its business sector (i.e., oil and gas) are appointed as such by SENIAT and therefore are subject to additional obligations and
formalities (specific calendar of compliance with tax returns/obligations as VAT withholding agent/VAT tax return made on a fortnightly basis).
The amount to be withheld is calculated by multiplying the price invoiced for the goods or ser vices provided by 75% of the proportional tax rate (currently 16%). As a result, the effective with holding rate is 12%.
The VAT withheld is treated as an advance payment for the supplier and may be deducted from the tax liability in the period in which the withholding is made or in the period in which the with holding receipt was received, whichever is later.
If the tax withheld is higher than the VAT proportional rate in the relevant fortnightly period, the excess tax paid may be carried forward to the following periods until it has been deducted in full. If three periods expire and the excess has not yet been deducted, the taxable person may choose to request a refund of the amount from the tax authorities.
If the withholding is made in the period from the 1st to the 15th day of the month, the tax with held must be submitted by the withholding agent to the national treasury within the following five working days. If the withholding is made from the 16th to the last day of the month, the tax withheld must be paid to the national treasury within the first five working days of the following month. For taxable persons who have been qualified by the SENIAT as “special taxable persons,” a different due date applies in accordance with the calendar issued by the SENIAT.
The VAT withheld must be submitted on a fortnightly basis, considering the calendar issued by the tax administration.
D. Rates
The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of VAT, including the zero-rate.
The VAT rates are:
• Standard rate: 16%
• Additional rates: 5%–25%
• Zero-rate: 0%
VAT law indicates that the minimum rate is 8% and the maximum rate is 16.5%. The National Executive also has the authority to determine the respective VAT rate (general rate and luxury consumption rate) within ranges provided in the VAT law. The luxury consumption (additional rate) is currently 15%. The 15% rate also applies to the sale or import of certain goods specified in the VAT law and specific services.
The standard rate of VAT applies to all supplies of goods and services, unless a specific measure provides for a different rate.
The additional rate between 5% and 25% applies to goods and provision of services paid in foreign currency, cryptocurrency or crypto assets other than those issued and backed by Venezuela (for example petro, a cryptocurrency created by the Venezuelan government).
At the time of preparing this chapter, the additional rate has not yet entered into force, considering that the National Executive has not established what the corresponding additional rate is.
Examples of goods and services taxable at 0%
• Exports of tangible personal property and tangible movable property
• Exports of services
Exempt goods and services are not liable to tax. The Venezuelan VAT law provides for the exemption and exoneration from VAT. Exemption is the entire or partial exemption of the payment of
the tax obligation, granted by the special tax law. Exoneration is the entire or partial exemption of the payment of the VAT obligation, granted by the executive power.
Examples of goods and services taxable at 15%
• Membership and maintenance fees of restaurants, nightclubs and bars with restricted access
• The rental of ships or aircraft for civilians, among others, for recreational activities or sports
• Services provided by third parties through text messaging or other technological means
• Cars imported or manufactured in the country with a value equal to or higher than USD40,000
• Motorcycles imported or manufactured in the country with a value equal to or higher than USD20,000
• Airplanes used for exhibitions, advertisement, recreation or sports purposes
• Ships and vessels for recreation and sports purposes or for particular use of its owner
• Gaming machines that use coins or cards
• Caviar
• Lease of ships for recreation and sports purposes or airplanes used for exhibitions, advertise ment, recreation or sports purposes
• Services rendered on behalf of third parties, through text messages or other technological means
The term “exempt supplies” refers to supplies of goods and services that are not liable to VAT and that do not qualify for input tax deduction.
Examples of exempt supplies of goods and services
• Food and goods for personal consumption such as bread, rice, salt, sugar, coffee, milk, pasta and margarine
• Books, newspapers and magazines
• Education provided by institutions registered in the Ministry of Education, Culture and Sports and the Ministry of Superior Education
• Public transportation of passengers by land or sea
• Tickets to national parks, museums and cultural centers
• Banking and insurance services
• Imports made by diplomatic agents, in accordance with international treaties subscribed to by Venezuela
• Medical assistance services
• Residential electricity
• Fertilizers
Option to tax for exempt supplies. Option to tax for exempt supplies is not allowed in Venezuela.
E. Time of supply
VAT generally becomes due when the taxable event occurs.
For sales of tangible personal or tangible movable property the following is the time of supply:
• For sales to public entities: when the payment order is authorized
• For all other sales: when the invoice or the necessary documents are issued, or when the pay ment is due or made, or the tangible property is delivered, whichever is earlier
For supplies of services, the following is the time of supply:
• For supplies of electricity, telecommunications and broadcasting and television services: when the invoice is issued
• For services rendered to public entities: when the payment order is authorized
• For services rendered on a recurrent basis: when invoice is issued, payment is due or made, whichever is earlier
• For other services: when the invoice or equivalent document is issued, when the payment occurs or when the service is provided, whichever is earlier
• For services received from abroad that are not subject to customs procedures: when the service is received
For all other supplies, the time of supply is when the invoice or equivalent document is issued, when payment is made or when the property is received, whichever is earlier.
Deposits and prepayments. There are no special time of supply rules in Venezuela for deposits and prepayments. As such, therefore the general time of supply rules apply (as outlined above). This establishes that for all other supplies not listed in the VAT law, the time of supply is when the invoice or equivalent document is issued, when payment is made or when the property is received, whichever is earlier.
Continuous supplies of services. VAT becomes due in cases of services rendered on a recurrent basis when invoice is issued, payment is due or made, whichever is earlier.
Goods sent on approval for sale or return. There are no special time of supply rules in Venezuela for supplies of goods sent on approval for sale or return. As such, the general time of supply rules apply (as outlined above). This establishes that for all other supplies not listed in the VAT law, the time of supply is when the invoice or equivalent document is issued, when payment is made or when the property is received, whichever is earlier.
Reverse-charge services. There are no special time of supply rules in Venezuela for supplies of reverse-charge services. As such, the general time of supply rules apply (as outlined above). This establishes that for all other supplies not listed in the VAT law, the time of supply is when the invoice or equivalent document is issued, when payment is made or when the property is received, whichever is earlier.
Leased assets. There are no special time of supply rules in Venezuela for supplies of leased assets. As such, the general time of supply rules apply (as outlined above). This means that VAT must be accounted for upon issuance of the invoice, payment or when the consideration is enforceable.
Imported goods. The time of supply for imports is when the registration of the customs return is due.
F. Recovery of VAT by taxable persons
Input tax (tax credit) is tax paid on supplies of goods and services acquired in the course of a taxable business activity. Input tax is deducted from the amount of output tax, which is the tax charged on the taxable person’s operations during the tax period. Input tax credit arises from the tax paid on the purchase and import of personal property or the receipt of services that are related to costs or expenses properly incurred in the habitual economic activity of the taxable person. Under the VAT law, input tax is considered to be effectively paid by the recipient of the goods or services when the taxable event occurs.
If the input tax is higher than the output tax in the relevant monthly/weekly period as the case may be, the difference may be carried forward to the following periods until it has been fully deducted.
There is no set time limit for a taxable person to reclaim input tax in Venezuela. This means that effectively the input tax (VAT credit) may be carried forward indefinitely until its complete recovery. If the input tax is reflected in the VAT return, it can be used at any time to be offset with output tax.
Nondeductible input tax. Input tax may not be recovered on purchases of goods and services that are not used for making taxable supplies. Input tax may not be recovered if no documentation supports the transaction or if one or more formal invoice requirements are not fulfilled.
Examples of items for which input tax is nondeductible
• Goods acquired for private use by an entrepreneur
Examples of items for which input tax is deductible (if related to a taxable business use)
• Input tax is deductible on every item that complies with the requirements (subject to VAT and related to a taxable business use)
Partial exemption. In Venezuela, partial exemption is not applicable. There are, however, exon erations (total or partial exemption from the payment of the tax obligation, granted by the Executive Power in the cases authorized by the law) that are temporary and can last up to one year. In case of input tax partially associated to taxable transactions, it can be recognized as input tax only on a pro rata basis, in cases where no separate accounts are used to discriminate both taxable and nontaxable transactions.
Capital goods. There are no specific input tax recovery rules for capital goods. As such, the gen eral input tax rules apply. The acquisition and sale of tangible movable assets will be taxable for VAT purposes whether or not such goods are referred to capital goods. In cases where acquisition of goods is used for both taxable and exempted activities, the attribution of the input tax shall be on a pro rata basis, in cases where it is not separately recognized. Regarding the use of the input tax from acquisition of goods note that such right is applicable for 12 months after issuance of invoice. This is the general rule to be observed under VAT law.
Refunds. If the amount of the deductible input tax is greater than the total tax payable in a tax period, the resulting difference is treated as a tax credit in favor of the taxable person, which may be carried forward to the next or subsequent tax periods.
The right to offset tax paid (tax credit) against the tax payable on sales (tax debit) is a personal right of each ordinary taxable person. This right may not be transferred to third parties, except in the following cases:
• Drawback of tax credits related to the purchase and acquisition of goods and services in the normal course of export activities (see Drawback of tax credits for exporters)
• Merger or absorption of companies; in a merger, the resulting company enjoys the remaining balance of the tax credit that corresponded to the merged companies
Drawback of tax credits for exporters. Ordinary taxable persons that export domestic goods or services are entitled to a drawback of the tax credits paid for the acquisition and receipt of goods and services with respect to their export activities.
Application for drawback. To obtain the drawback of credits, the exporter must file an applica tion with the SENIAT, stating the amount of the tax credit claimed. The SENIAT must give its opinion on the admissibility of the application within 30 business days. If the SENIAT does not express its opinion with respect to the application in the period of 30 business days, the taxable person may choose to wait for the decision or consider the expiration of the period to be equiva lent to the rejection of the application. In the latter case, the taxable person may take the appropri ate judicial action.
The drawback becomes effective on the issuance of special tax drawback certificates (Certificados Especiales de Reintegro Tributario, or CERT), with a face value equal to the amount approved by the SENIAT with respect to the claim. The exporter may use this amount to offset its own tax payments due to the National Treasury or it may transfer the credit to third parties.
Suspension of tax credits. A taxable person that is involved with the development of an indus trial project that takes more than six tax periods to be developed may suspend the use of the tax credits generated during the preoperational stage of the project. The taxable person may use domestic and imported capital goods and purchase services that add value to the goods or that are necessary for the goods to perform the function for which they are designed, until the tax period in which they begin to generate taxable income. The tax credits are adjusted taking into account the consumer price index for the Caracas metropolitan area published by the Central Bank of Venezuela, from the period when the tax credits arose until the tax period in which the first tax payment is generated.
With the approval of the SENIAT, taxable persons that are involved in industrial projects aimed essentially towards exporting or generating foreign currency may choose to be refunded the tax paid during the preoperational stage.
Recovery of tax credits for special taxable person. In the case where the withheld tax is higher than the tax quota of the respective tax period, the surplus that has not been discounted can be carried forward to the next tax period or the following ones, until its total discount. If after three tax periods there is a surplus that has not been discounted, the taxable person can request the full or partial recovery of the accrued amount.
Recovery of tax credits for exporters. Taxable persons that carry out export activities related to goods or services of national production are entitled to recover the tax credits supported by the acquisition and reception of goods and services for their export activities.
Recovery of tax credits for oil industry. Mixed companies (empresas mixtas) that carry out activi ties related to oil and gas. Such companies are entitled to the recovery of tax credits related to the sale of natural hydrocarbons created in the country to Petroleos de Venezuela, S.A. or its subsidiar ies.
Pre-registration costs. Input tax incurred on pre-registration costs in Venezuela is not recoverable.
Bad debts. Output tax accounted for on supplies that do not get paid by the recipient (i.e., bad debts) cannot be recovered in Venezuela.
Noneconomic activities. Input tax incurred on purchases that are used for noneconomic activities is not recoverable in Venezuela.
G. Recovery of VAT by non-established businesses
Input tax incurred by non-established businesses in Venezuela is not recoverable.
H. Invoicing
VAT invoices. Taxable persons must provide VAT invoices for all sales of goods and supplies of services. Invoices may be replaced by other documents authorized by the SENIAT after such authorization is granted.
Credit notes. The VAT ruling establishes that the exchange or return to the seller of goods, mer chandise or products purchased, made because they are in poor condition, expired, damaged, for not matching quality or characteristics to those actually acquired, or other causes will not consti tute a new sale, but will give rise to the issuance of credit notes or the issuance of new substitute invoices of the previously issued ones, which will be annulled.
If the merchandise is returned only in part, the tax credit will be limited to the part of the price corresponding to such part. The credit notes must be registered with a negative sign in the invoice column of the sales book. When substitute invoices are issued, it must be recorded in the sales book, in the same column where the amount of the voided invoice was recorded.
Electronic invoicing. Electronic invoicing is allowed in Venezuela, but not mandatory. In Venezuela, electronic invoicing is only permitted for taxable persons that are large services pro viders (usually utilities) and can be private or public legal entities, as per the following operations:
• Electricity
• Drinking water
• Domestic gas
• Urban cleaning
• Basic telephone services
• Mobile telephone services
• TV by subscription
• Internet
Simplified VAT invoices. Simplified invoices issued by tax machines (tickets) are allowed for ordinary VAT taxable persons, duty free shops and those that are not considered ordinary taxable persons, when the annual gross income is higher than 1,500 tax units (1 tax unit is equivalent to VES20,000/USD0.0049 and/or where businesses mainly execute transactions with customers that will not be using the invoice to support an expense claim, among other conditions.
Self-billing. Self-billing is allowed only when under reverse-charge mechanism (import of ser vices).
Proof of exports. The document (e.g., commercial invoice, bill of lading, custom/export return) filed before the customs authority would be sufficient proof of export for VAT purposes. The sale made to a qualifying exporter would be subject to VAT. There is no legislation in respect of any special wording or legislative references required on a VAT invoice relating to an export sale.
Foreign currency invoices. A VAT invoice can be issued in foreign currency, but it must also indi cate the value of the supply in the domestic currency, which is the Venezuelan bolivar (VES), using the exchange rate published by the Venezuelan Central Bank on its website for the date of the transaction.
Supplies to nontaxable persons. There are no special invoicing rules for supplies to nontaxable persons in Venezuela. As such, full VAT invoices are required.
Records. Taxable persons must keep in an orderly manner books, invoices and other accounting documents, such as magnetic media, discs, tapes and the like or other elements, which have been used to make the corresponding entries and records. All records must be kept in Venezuela.
Record retention period. Records must be kept during the statute of limitation. Under Master Tax Code, the statute limitation is a period between 6 and 10 years.
Electronic archiving. Records shall be kept and archived in hard copy and electronically. Records must be available in case of any requirement from the tax administration.
I. Returns and payment
Periodic returns. The tax is assessed for monthly tax periods. Tax returns must be submitted within the first 15 days following the tax period. It should be filed online.
In the case of special taxable persons, the VAT return shall be filed on a fortnightly basis after the taxable events occur. The due date is established by the tax administration on a special calendar. “Special taxable persons” is a category created by the tax administration that refers to specific taxable persons that, due to their high level of income or their business sector (i.e., oil and gas), are appointed as such by SENIAT and therefore are subject to additional obligations
and formalities (specific calendar of compliance with tax returns/obligations as VAT withholding agent/VAT and income tax advance tax return made on a fortnightly basis).
Periodic payments. The payment of any tax due must be submitted within the required timing, i.e., for ordinary taxable persons – 15 days after monthly period concludes or special taxable persons one week after the fortnightly period concludes, based on calendar issued by tax admin istration. It should be filed online and should be paid before any bank institution that is appoint ed as tax collector (major banks and public banking institutions).
Electronic filing. Electronic filing is mandatory in Venezuela for all taxable persons. Electronic filing should be made through the portal website of SENIAT (http://declaraciones.seniat.gob.ve/ portal/page/portal/PORTAL_SENIAT).
Payments on account. Payments on account are not required in Venezuela.
Special schemes. Special taxable persons. The taxable persons qualified as “special” (high level of income) by the tax administration will act as withholding agents for the VAT invoiced by their suppliers of goods or services. The tax administration defined high level of income for entities and corporations to those who have obtained gross income equal to or greater than the equivalent of 30,000 tax units, as indicated in their last annual affidavit filed, in the case of taxes that are settled for annual periods, or that have been made sales or provision of services for amounts equal to or greater than the equivalent of 2,500 tax units per month, as indicated in any one of the six last returns filed, in the case of taxes that are settled by monthly periods.
Annual returns. Annual returns are not required to be filed in Venezuela.
Supplementary filings. No supplementary filings are required in Venezuela. However, there is an obligation to maintain a sales book, among other books (i.e., a daily book, inventory book, mayor book (ledger), shareholder book, shareholders meeting minutes book). Nevertheless, these books must be provided to the tax authority only when it is required through a legal procedure. In this sense, it is not be considered a supplementary filing.
Correcting errors in previous returns. In accordance with the VAT law, a substitute tax return will only be filed for the periods subject to adjustments, when these originate a difference in tax pay able, taking into account the payment made in a substituted declaration, if applicable, and with out prejudice to the interest and corresponding penalties.
Digital tax administration. There are no transactional reporting requirements in Venezuela.
J. Penalties
Penalties for late registration. The penalty for late registration is closure of the office (when appli cable) for 5 days and a fine of the equivalent of 50 times the official exchange rate of the highest value currency, published by the Central Bank of Venezuela.
Penalties for late payment and filings. The penalty for late payment and filings will be:
• Less than one year from the expiration date
Late filing: a fine of the equivalent of 100 times the official exchange rate of the highest value currency, published by the Central Bank of Venezuela
Late payment: a fine of 0.28% of the amount due for each day of delay up to maximum of 100%
• After one year but less than two years from the expiration date
Late filing: closure of the office (when applicable) for 10 days and a fine of the equivalent of 150 times the official exchange rate of the highest value currency, published by the Central Bank of Venezuela
Late payment: an additional fine than previously indicated equivalent to 50% of the amount due
• Delay exceeding two years from the expiration date
Late payment: an additional fine to what was previously indicated equivalent to 150% of the amount due
The penalty for nonpayment of VAT is a fine between 100% and 300%.
Failure to withhold VAT may result in the following penalties:
• For not withholding, a penalty equivalent to 500% of the tax not withheld will be applicable
• For applying a withholding in a lower amount, 100% of the 100% of the tax not withheld will be applicable
• For late payment of the withholding tax (WHT), a penalty equivalent to 5% of the amount with held for each day of delay up to a delay up to a maximum of 100 days will be applicable delay up to a maximum of 100 days will be applicable
• For nonpayment of WHT, a penalty of 1,000% of the WHT due and possible imprisonment between six months to seven years will be applicable
Supplementary VAT returns (substitutive) are allowed when there is a VAT amount to be paid (output tax higher than input tax). Submission of substitutive (rectifying) declarations is subject to fines only after the file of the second substitution or when the first substitute declaration is submitted after the 12 months following expiration of the deadline for the presentation of the substituted declaration. In these cases, a fine equivalent to 50 times the official exchange rate of the currency of greater value published by the Central Bank of Venezuela will apply.
In case of failing the notification of change in VAT status, the taxable person will be sanctioned with closure of 5 continuous days of the office or establishment, in case is applicable, and a fine of the equivalent of 100 times the official exchange rate of the highest value currency, published by the Central Bank of Venezuela.
In those cases in which more than one substitute tax return is filed or the first substitute tax return is filed after the term established in the respective regulation, a fine equivalent to 50 times the official exchange rate of the currency of greater value published by the Central Bank of Venezuela will apply.
Penalties for errors. Noncompliance of formal duties are sanctioned as follows:
• Failure to file the VAT declaration
• Incomplete filing of the VAT declaration
• Filing of the declaration in a form not authorized by the SENIAT
• Failure to exhibit accounting books when ordered to by the SENIAT
• Providing the SENIAT with false information
• Breaching the SENIAT’s requirements for purchases and sales books
• Failure to issue invoices or required documents
• Issuing invoices that do not comply with tax requirements
Penalties for fraud. The penalty for tax fraud is a term of imprisonment, ranging from six months to seven years.
Personal liability for company officers. The directors, managers, administrators or representatives of entities and corporations are jointly liable for the taxes, fines and accessories derived from the assets they administer.
In cases of commission of illicit punishments with restrictive penalties of freedom, their direc tors, managers, administrators, representatives or trustees who have personally participated in the execution of the illicit will be responsible.
Statute of limitations. The statute of limitations in Venezuela is 6 or 10 years.These two limita tions apply to different actions, as outlined below.
• 6-year limit:
The action to verify, supervise and determine the tax obligation with its accessories
The action to impose tax sanctions, other than the restrictive penalties of freedom
The action to demand the payment of tax debts and definitive financial penalties
The right to the recovery of taxes and the refund of undue payments • 10-year limit:
The taxable person does not comply with the obligation to declare the taxable event or to file the corresponding tax returns
The taxable person does not comply with the obligation to register in the control registers established by the tax administration for the purposes
The tax administration has not been able to know the taxable event, in the cases of verifica tion, tax audit and determination ex officio
The taxable person has extracted from the country the goods subject to the payment of the tax obligation or in the case of taxable events linked to acts carried out or to goods located abroad
The taxable person does not keep accounting or records of the operations carried out, does not keep them during the established period, or keeps double accounting or records with dif ferent contents