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Dividends paid by Venezuelan companies and branch remittances are
taxable at the extent that income before taxes exceeds net taxable
income at a rate of 34%. The rate may be reduced by the relevant
treaty. If the amount paid is reinvested in Venezuela for a period
of at least 5 years, no tax is levied on the payment.
Interest and royalties subject to withholding tax at a rate of
34%. The rate may be reduced through the treaty. Dividends paid
to non resident individuals are subject to withholding tax on 90%
of the gross amount (95% for corporations).
No debt-to-equity ratio is applied in Venezuela. Loans granted
by related parties are deductible without limitation.
Venezuela has concluded double tax treaties with the following
countries:
Tax Treaties
Uruguay has concluded double tax treaties with Hungary and Germany.
Consequently, it is possible to use only these two jurisdictions
for international tax planning purposes.
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Barbados |
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5/10
(v) |
5/15 |
10 |
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Belgium |
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5/15
(j) |
10 |
5 |
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Czech
Republic |
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5/10
(k) |
10 |
12
(g) |
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Denmark |
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5/15
(j) |
0 |
5/10
(x) |
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France |
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0/5/15
(p) |
5 |
5 |
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Germany |
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5/15
(k) |
5 |
5 |
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Indonesia |
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10/15
(w) |
10 |
20
(g) |
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Italy |
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10 |
10 |
10
(a) |
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Mexico |
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5 |
4.95/10/15
(y) |
10 |
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Netherlands |
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0/10
(u) |
5 |
5/7/10
(d) |
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Norway |
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5/10 |
5/15
(z) |
9/12
(e) |
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Portugal |
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10 |
10 |
10/13
(e) |
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Sweden |
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5/10 |
10 |
7/10
(o) |
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Switzerland |
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0/10
(m) |
5 |
5 |
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Trinidad
& Tobago |
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5/10
(q) |
15 |
10 |
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UK |
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0/10
(n) |
5 |
5/7
(c) |
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US |
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5/15
(r) |
4,95/10
(s) |
5/10
(t) |
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Non
Treaty Countries |
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34/50/60
(i) |
34
(f) |
34
(f) |
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(a) The rate is 7% for royalties relating to literary, artistic
or scientific works, or to films.
(b) Under Venezulan domestic law, a reduced withholding
tax rate of 4.95% applies to interest paid to financial institutions
not domiciled in Venezuela.
(c) The rate 5% applies to royalties for patents,
trademarks and know-how; the 7% rate applies to royalties for copyrights
and for artistic and scientific works.
(d) The 5% rate applies to payments for technical
assistance. The 7% rate applies to payments for brand names or commercial
names. The 10% rate applies to royalties for copyrights of literary,
artistic or scientific works.
(e) The lower rate applies to payments for technical
assistance. The 12% rate applies to royalties.
(f) Paid to Corporations
(g) The rate is 10% for royalties relating to copyrights
of literary, artistic or scientic works
(h) This is the general rate. Certain special rules
apply.
(i) Dividends paid by Venezuelan companies and
profits remitted by permanent establishments of foreign companies
to their home countries are taxable to the extent that “income
before taxes” exceeds “net taxable income.” For
this purpose, “income before taxes” is financial income
before the tax reconciliation and “net taxable income”
is the resulting income subject to tax after the tax reconciliation.
However, the tax does not apply to remittances paid by permanent
establishments of foreign companies if the permanent establishment
can prove that the excess amount is reinvested in Venezuela for
at least five years.
(j) The 5% rate applies if the beneficial owner
of the dividends is a company that
Owns at least 25% of the capital of the payer of the dividends.
The 15% rate applies to other dividends.
(k) The 5% rate applies if the beneficial owner
of the dividends is a company that owns at least 15% of the capital
of the payer of the dividends. The higher rate applies to other
dividends.
(l) The 5% rate applies if the beneficial owner
of the dividends is a company that owns at least 10% of the capital
of the payer of the dividends. The 10% rate applies to other dividends.
(m) The 0% rate applies if the beneficial owner
of the dividends is a company that directly controls at least 25%
of the capital of the payer of the dividends. The 10% rate applies
to other dividends.
(n) The 0% rate applies if the beneficial owner
of the dividends is a company that directly or indirectly controls
at least 10% of the voting rights of the payer of the dividends.
The 10% rate applies to other dividends.
(o) The 10% rate applies to royalties related to
literary, artistic or scientific works, or films. The 7% rate applies
to other royalties
(p) The 5% rate applies if the beneficial owner
of the dividends is an individual or company that owns at least
10% of the capital of the payer of the dividends. The 15% rate applies
to other dividends.
(q) The 5% rate applies if the benefical owner
of the dividends is a company that owns at least 25% of the capital
of the payer of the dividends. The 10% rate applies to other dividends.
(r) These rates apply to dividends paid from Venezuela.
The 5% rate applies if the beneficial owner of the dividends is
a company that owns at least 10% of the voting stock of the payer
of the dividends. The 15% rate applies to other dividends.
(s) The 0% rate applies to interest paid to the
Eximbank, Federal Reserve Bank, Private Investment Corporation,
Foreign Trade Bank, Central Bank of Venezuela and Venezuelan Investment
Fund. The 4.95% rate applies to interest paid to financial institutions
or insurance companies. The 10% rate applies to other interest payments.
(t) The 0% rate applies to royalties paid for technical
services, scientific, geological or technical studies, engineering
works, consulting or supervision services, if the recipient does
not have a permanent establishment. The 5% rate applies to royalties
paid for industrial, commercial or scientific equipment. The 10%
rate applies to royalties paid for the following: patents, designs
or models; plans or secret formulas or processes; industrial, commercial
or scientific know-how; trademarks and copyrights with respect to
literature, art or science; and motion pictures, and movies and
tapes for radio or television broadcast.
(u) The 0% rate applies if the recipient of the
dividends owns at least 25% of the shares of the payer. The 10%
rate applies to other dividends.
(v) The 5% rate applies if the beneficial owner
of the dividends is an individual or company that owns at least
5% of the capital of the payer of the dividends. The 10% rate applies
to other dividends.
(w) The 10% rate applies if the beneficial owner
of the dividends is a company that owns at least 10% of the capital
of the payer of the dividends. The 15% rate applies to other dividends.
(x) The 5% rate applies to technical assistance
fees. The 10% rate applies to royalties paid for literary, artistic
or scientific works or films.
(y) The 4.95% rate applies to interest paid to
banks or insurance companies. The 10% rate applies if the beneficial
owner of the interest is not one of the entities mentioned in the
preceding sentence and if ether of the following additional conditions
is satisfied: the interest is paid by banks; or the interest is
paid on bonds or other credit securities that are traded regularly
and substantially on a recognised securities market. The 15% rate
applies to other interest payments.
(z) The 5% rate applies to interest paid to banks.
The 15% rate applies to other interest payments.
Venezuela’s other tax treaties cover only
air and maritime transportation.
Salient Features
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Corporate
Income Tax |
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Under
Venezuelan domestic law, profits are taxable at a maximum
34% progressive rate which applies to the income exceeding
BS 24,700. |
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Dividends
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Dividends
received from Venezuela by non resident shareholders are exempt
from income tax withholding under domestic law to the extent
the relevant dividends are distributed out of earning which
have been previously taxed at the corporate level. Any excess
distributions which relate to earning that have not been taxed
at the corporate level are subject to a 34% withholding tax. |
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Interest
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Under
Venezuelan tax law, interest that is computed on an arm’s-length
basis is generally deductible without limitation, and is subject
to a 32,3% withholding tax (for corporations; 30,6% for individuals). |
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Royalties
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Withholding
tax rate is 34%. |
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Loss
Relief |
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Losses
may be only carried forward for up to three years. |
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Case Studies
Offshore Investing Into Venezuela
EU Company Investing Into Venezuela
Venezuelan Individual Investing
Into Venezuela
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