ey.com/globaltaxguides
Caracas GMT -4
EY
Avenida Francisco de Miranda
Centro Lido, Torre A, Piso 13
El Rosal
Caracas 1060
Venezuela
Executive and immigration contacts
José A. Velázquez
Ruben Zerpa
A. Income tax
+58 (212) 905-6600
Fax: +58 (212) 954-0069
Email: jose.a.velazquez@ve.ey.com
+58 (212) 905-6676
Fax: +58 (212) 954-0069
Email: ruben.zerpa@ve.ey.com
Who is liable. Tax resident individuals pay tax on their worldwide income. Residents are subject to tax if their annual worldwide gross income exceeds 1,500 tax units or if their annual worldwide net income exceeds 1,000 tax units. For the 2024 tax year, the value of a tax unit is VES9. For the 2023 tax year, the value of a tax unit was VES9. The bolivar to tax unit ratio can be modified at least one time in a year by the tax administration, subject to the approval of the National Assembly. Nonresident individuals are taxed on Venezuelan-source income, regardless of where the payment was made.
Individuals are considered resident for tax purposes if they are physically present in Venezuela for more than 183 days in the current or immediately preceding calendar year. An individual who has acquired a tax residency in a jurisdiction with which Venezuela has a valid double tax treaty is protected under the independent or dependent personal services clause.
Income subject to tax. The taxation of various types of income is described below.
Employment income. Taxable net employment income consists of all compensation or profit, regular or accidental, resulting from the provision of personal services under a dependence relationship, regardless of the character of the wages.
Severance indemnities received by employees or their beneficiaries and travel-expense reimbursements related to rendering personal services are excluded from total income.
Tax nonresidents are taxed using a flat rate of 34%, which is applicable to the total amount of their income, received from Venezuelan sources during the tax year.
Self-employment and business income. The taxable income for self-employed individuals is determined in accordance with the rules described in Employment income and by following the tax nonresident guidelines, if they are relevant.
Annual gross income in excess of 1,500 tax units or net taxable income in excess of 1,000 tax units must be formally declared before the local tax authorities. To determine net taxable income, individuals must deduct all costs and expenses that were essential to produce the self-employment income and/or business income.
Tax nonresident individuals are subject to a final tax rate of 34% on income derived from Venezuelan sources.
Directors’ fees. Directors’ fees relating to activities performed in Venezuela and received by employees from resident companies are taxed as employment income at the rates described in Rates If the individual is not an employee, the income received as directors’ fees is taxed as self-employment income.
In addition, an individual is subject to social security contributions on directors’ fees. The contribution is based on a percentage of monthly salary earned. For further details, see Rates.
Investment income. Interest received by resident and nonresident individuals from savings instruments issued by Venezuelan banks and other financial institutions are tax-exempt. Other interest is aggregated with other income and taxed at the rates described in Rates.
Tax nonresident individuals are subject to a final withholding tax at a rate of 34% on royalties derived from Venezuela.
Effective from January 2001, dividends paid by Venezuelan companies are subject to withholding tax at a rate of 34% to the extent that income before taxes exceeds net taxable income for tax years beginning on or after the effective date. “Income before taxes” is defined as financial income before tax reconciliation, and “net taxable income” is income subject to tax after tax reconciliation. Recipients are subject to tax at the same rate on dividends from non-Venezuelan companies, less any foreign taxes paid.
Capital gains. Capital gains are taxed with other income according to the Tariff No. 1 rates described in Rates.
Deductions
Personal deductions and personal tax credit. Only tax resident individuals are allowed to deduct the following items:
• Mortgage interest payments for a principal dwelling, limited to an amount equivalent to 1,000 tax units, rent payments for a principal dwelling, limited to an amount equal to 800 tax units.
• Payments to educational institutions in Venezuela for taxpayers and their children under 25 years of age. The age limit does not apply to expenses incurred on the education of handicapped children and adults under the tutelage of the taxpayer.
• Premiums for surgery, hospitalization and maternity insurance paid in Venezuela to domiciled companies (no limit).
• Medical, dental and hospitalization expenses incurred in Venezuela for the taxpayer, spouse and ascendants or descendants (no limit).
Taxpayers must keep the documentation (receipts and vouchers) supporting the deductions mentioned above in case of a tax audit, and the payments related to the deductions must be made in Venezuela.
Social security treaties. Venezuela has entered into social security treaties with Chile, Ecuador, Greece, Italy, Portugal, Spain and Uruguay.
Under the above treaties, nationals of the treaty countries who are working in Venezuela or Venezuelans who are working in the treaty countries may rely on the treaties to avoid double social taxation for the time period stated in the treaties. However, according to the Social Security Institute, the only treaty that is in effect for Certificates of Coverage is the Spain treaty.
D. Tax filing and payment procedures
For individuals, the tax year in Venezuela is the calendar year. Tax returns must be filed by 31 March of the following tax year on the official website of the tax authorities. The tax liability indicated on the return may be paid in three portions. The first is due when the return is filed, the second one within 20 days after filing the return and the third one within 40 days after the return is filed.
Married persons are taxed either jointly or separately, at the taxpayers’ election, on all types of income.
E. Double tax relief and tax treaties
Income is separated into two baskets, one for foreign-source income and expenses and another for domestic-source income and expenses. Foreign taxes paid on the foreign-source income may offset the Venezuelan tax on that income only. However, losses in the Venezuelan-source basket may be offset against foreign-source income.
Venezuela has entered into double tax treaties with the following jurisdictions.
Austria Germany Russian Federation Barbados Indonesia Spain
Belarus
Belgium
Iran Sweden
Italy Switzerland
Brazil Korea (South) Trinidad
Canada
China Mainland
Kuwait and Tobago
Malaysia
United Arab
Cuba Netherlands Emirates
Czech Republic
Norway
United Kingdom
Denmark Portugal United
France
F. Temporary visas
Qatar
Vietnam
Venezuela issues tourist visas. Foreign nationals with tourist visas may not work as employees or engage in business in Venezuela. Business visas allow individuals to conduct commercial affairs or to provide technical assistance.
G. Work visas and permits
Under the Immigration Law, foreign citizens who intend to render services in Venezuela for more than 90 days must obtain a labor permit (authorization) and a labor visa (Working Transient Visa; known as “TR-L”). The company that intends to employ the foreign citizen requests the labor permit. If a foreign citizen will not be in Venezuela for more than 90 days, neither a labor permit nor a labor visa is required.
To obtain a TR-L, the foreign citizen must have a passport that had been issued by the respective authority at least six months before the request for the TR-L, as well as an employment contract with a Venezuelan entity. The visa has a term of one year and may be renewed for an additional term of one year. The holder of the TR-L may make multiple entries into Venezuela or may stay in Venezuela for the entire period of the visa.
To obtain a labor visa and work permit, the company must file an application with the Office of Migration and the Ministry of Labor, which will issue the labor visa and the labor permit respectively, within 15 business days following the request. In practice, the period for the issuance of the visa may be extended for an additional 15 days.
Work visa. To obtain a work visa, the following documents must be submitted to the Office of Migration (Dirección de Extranjería):
• Proof of payments by the employer to the National Socialist Training Institute (Instituto Nacional de Capacitación y Educación Socialista, or INCES)
• Proof of last three payments by the employer to the social security system
• Health certificate apostilled
• Criminal records apostilled
• Authorization letter
• Justification letter (providing reasons for requesting labor visa)
• Entry request form, issued by the Administrative Service Office for Identification, Immigration and Foreign Purposes (Servicio Administrativo de Identificación, Migración y Extranjeria, or SAIME)
• Four front pictures, with a white background, sized 4cm x 3cm
• Copy of the entire passport with more than six months of validity and more than six pages (copy must be in color)
• Notarized employment contract (original)
• University or college or technical or associate degree, translated into Spanish if in another language, legalized and apostilled in the country of residence before the Venezuelan consulate, or annotated