Income Tax Exemptions in Venezuela
Income Tax in Venezuela
Income Tax: A tax paid to the Venezuelan state (through the SENIAT) on profits earned in the fiscal year.
Exemptions
Exemptions: Consist of the total or partial waiver of compliance with the tax liability, granted by law. Beneficiaries are obliged to inform the Tax Administration for proper audit and control.
Article 14 LISLR: Entities Exempt from Tax
- Venezuelan public entities, the Central Bank of Venezuela, and the Investment Fund of Venezuela.
- Other autonomous institutes determined by law.
- Foreign officials and diplomats accredited to the Republic, for the salaries they receive from their governments. This also includes consular officials and other servants or officials of foreign governments.
- Charities and social assistance organizations.
- Policyholders and their beneficiaries who receive compensation due to insurance contracts.
- Pensioners or retirees receiving pensions for retirement or disability.
Tax Disclaimer
Disclaimer: Consists of the total or partial waiver of compliance with tax obligations, issued by the National Executive as permitted by law. Beneficiaries are obliged to inform the Tax Administration for proper audit and control.
The Tax Code provides that the Act authorizing the National Executive to grant exemptions shall specify the charges to include, the budgets needed to proceed, and the conditions to which the benefit is subject. The law may empower the National Executive to submit the exemption to certain terms and conditions, among which are:
- A maximum term of 5 years, after which the National Executive may extend it. Exemptions granted to non-profit institutions may be indefinite. Both exemptions and waivers may be modified by subsequent law.
- Exemptions will apply to the tax year in progress on the date of registration of the exemption, which may be granted until the last day of the applicable fiscal year-end. Only natural persons who have received gross income exceeding 2,625 tax units (2625 UT) in the previous year are required to register.
Exemption Application
- For the years beginning in 2000, 2001, and 2002, the exemption shall be 100% of the tax.
- For the year beginning in 2003, the exemption will be 90%.
- For the year beginning in 2004, the exemption will be 70%.
- For the year beginning in 2005, the exemption shall be 60%.
- For the year beginning in 2006, the exemption will be 50%.
- For the year beginning in 2007, the exemption will be 30% of the tax.