Venezuela - Income Tax

Venezuela - Income Tax

Taxation of international executives

Related content

Tax returns and compliance

When are tax returns due? That is, what is the tax return due date?

31 March.

What is the tax year-end?

31 December.

What are the compliance requirements for tax returns in Venezuela?


Filing requirements

All individuals obtaining yearly net income that exceeds 1,000 tax unit or gross income that exceeds 1,500 tax units must report such income by filing a tax return with the Venezuelan tax administration within the first three months after the end of the fiscal year, or by 31 March in each year.

The value of the tax unit for the year 2015 is VEF 150, for fiscal year 2014 was 127 .

Spouses, if not legally separated, are considered to be joint taxpayers. The spouse may elect to file a separate return for his/her own employment income, but in that case only one of the spouses may claim the deductions and exemptions available to both parties.

The tax payment arising from the final income tax return may be paid in three installments, the first one on or before 31 March of each fiscal year when filing the tax return, the other two installments will be pay on the date issued by the Tax Administration in the payment commitment. If any of these payments is made after the applicable due date, taxpayer must pay in full the amount owed, it may not elect to pay in installments, however an interest charge will be imposed on the late payment.


Individuals pay tax either through withholding or by making estimated tax payments. Both residents and non-residents are subject to withholding of income tax by the employer on wages. Wages include cash payments for services performed by an employee for his/her employer. Non-cash payments would not be subject to withholding. The income tax withholding rate is determined based on Form ARI, which is the tax withholding determination. For non-residents, income tax withholding is required only for job rendered in Venezuela; and tax withholding is set at a flat rate of 34 percent on all income.

Estimated tax payments

A self-employee individual who has income that is effectively connected with a Venezuela trade or business (other than salary income) is subject to estimated payment requirements, only if had a gross income exceeding 1,500 tax units (VEF 265,500) in the year from other activities or services (self-employed). An estimated tax return must be filed by 30 June of every year.


An individual is considered to be a tax non-resident of Venezuela if he/she stays in the country for 183 days or less during the calendar year and has not qualified as a resident in the preceding calendar year.

Filing requirements

Non-residents should file a Venezuelan tax return for all income from or losses sustained in Venezuela, whatever the amount. Frequently, tax return for nonresident with working visa is required at departure time at the airport. 

Tax rates

What are the current income tax rates for residents and non-residents in Venezuela?


The tax table for 2015 is based on tax units of income. 

Income tax table for 2015

Taxable income bracket Tax rate on income in bracket
From tax unit To tax unit Percent
0 1,000 6
1,001 1,500 9
1,501 2,000 12
2,001 2,500 16
2,501 3,000 20
3,001 4,000 24
4,001 6,000 29
6,001 Over 34



Non-residents are subject to a 34 percent flat tax rate on any income from Venezuelan source.

The non-resident tax rates are as follows.

Type of income* Percent
Gross employment income 34
Professional services income 34
Other taxable (business) income 34
Interest income (except bank interest) 34
Dividend income 34
Bank interest 0

* Refers only to Venezuelan source income.

Residence rules

For the purposes of taxation, how is an individual defined as a resident of Venezuela?

An individual is considered to be a tax resident of Venezuela if he/she stays in the country for more than 183 days during the calendar year or in the previous calendar year.

Also, individuals who have established their residence or home in the country, except if they remain in another country for a consecutive or non-consecutive term of 183 days during the calendar year and evidence having acquired residency in that other country for tax purposes.

Is there, a de minimus number of days rule when it comes to residency start and end date? For example, a taxpayer can’t come back to the host country for more than 10 days after their assignment is over and they repatriate.

No, there is no de minimus number of days rule.

What if the assignee enters the country before their assignment begins?

The days present in Venezuela before the assignment begins would count in order to determine tax residency.

Termination of residence

Are there any tax compliance requirements when leaving Venezuela?

If residence is terminated, it is necessary to file an income tax return with the tax administration for the period of time during the year in which income was received. If the total income received during such period of time does not exceed 1,000 tax units, an income tax return needs to be filed indicating that it is not subject to income tax.

What if the assignee comes back for a trip after residency has terminated?

Days present in Venezuela will be considered to determine the tax residence period. If the trip is work related, there is no chargeback to the Venezuelan entity and the individual claims to have tax residency in another country and the individual is resident in a country who has signed a treaty to avoid double taxation on income tax with Venezuela, it is likely that there would be no obligation to pay taxes, nevertheless it is important to file a tax return claiming tax treaty benefits and to provide a foreign residence certificate to be issued by the Tax Administration of the country of residency.

Communication between immigration and taxation authorities

Do the immigration authorities in your country provide information to the local taxation authorities regarding when a person enters or leaves your country? 

The immigration authorities can provide information to the local tax authorities regarding when a person enters or leaves your country upon request. This information is requested when the tax administration provides a Tax Residency Certificate.

Filing requirements

Will an assignee have a filing requirement in the host country after they leave the country and repatriate? 

It is probable that often the assignee leave the Country, still receive income connected to its Venezuelan resident status or Venezuela source. In such cases a tax return should be filed.

Once the individual has broken Venezuela tax residency and has no Venezuelan-source income, there would be no filing requirement in the following year of repatriation, unless the individual has tax credits subject to refund, for which a tax return filing is required to avoid its prescription term.

Economic employer approach1

Do the taxation authorities in your country adopt the economic employer approach to interpreting Article 15 of the OECD treaty? If no, are the taxation authorities in your country considering the adoption of this interpretation of economic employer in the future?

There is no precedent that the Venezuela taxation authorities adopt the economic employer approach to interpreting Article 15 of the OECD treaty, however it is more probable that the economic employer approach is adopted by the tax administration. Most of the double tax treaties that Venezuela has signed with other countries follows the OECD model and its commentaries are general used to support tax interpretations which in many cases it is aligned with the local tax doctrines.

De minimus number of days2

Are there a de minimus number of days before the local taxation authorities will apply the economic employer approach? If yes, what is the de minimus number of days?

There is no de minimus number of days before the local taxation authorities will apply the economic employer approach.

Types of taxable compensation

What categories are subject to income tax in general situations?

The following typical components of an expatriate’s compensation package should be regarded as taxable unless otherwise stated:

  • All compensation, regular or accidental, resulting from the provision of personal services under a dependence relationship would be subject to Venezuelan income tax.
  • Reimbursement of taxes.
  • Remuneration received free of tax will be grossed-up for income tax purposes to a pre-tax gross salary.
  • School tuition reimbursements.
  • Cost-of-living allowances.
  • Expatriation premiums.
  • The benefit of free accommodation in employer-owned premises which would be valued at market value. For employer-rented accommodation, the value of the benefit would probably be equal to the lease paid by the employer. Where the employer reimburses lease paid by the employee, the entire lease amount constitutes taxable employment income for the employee.
  • The personal use of a company car.
  • The provisions of rest and relaxation facilities or allowances paid to the employee are taxable.
  • Moving expenses and per diems, as long as the supports are available to demonstrate the expense.

Tax-exempt income

Are there any areas of income that are exempt from taxation in Venezuela? If so, please provide a general definition of these areas.

The following income is considered tax-exempted according to the tax law.

Local savings plans and retirement funds

  • Employer contributions to local savings plans and retirement funds are not taxed to the employee.


  • If the employer makes loans to the employee at reduced interest rates, the value of the interest is more likely than not to be a taxable income.

Interest on local savings and deposit bank accounts

  • Interest earned on local savings and deposit bank accounts is tax exempt.

Labor severance indemnities

  • Labor severance indemnities and its interests.


  • Representation expenses.

Meal voucher

  • Meal vouchers granted to employees as an employee benefit.

Expatriate concessions

Are there any concessions made for expatriates in Venezuela?

There are no special concessions generally available to expatriates. Nevertheless, the Government may grant annual exemptions (3000 tax units exemptions granted in 2015 tax year) for individuals. Also Venezuelan has signed double tax treaties with several countries that contain special tax treatment for short-term assignment.

Salary earned from working abroad

Is salary earned from working abroad taxed in Venezuela? If so, how?

When a resident renders its services outside of Venezuela on behalf of his/her Venezuelan employer, then the remuneration received for those services is taxable in Venezuela. However, for non-Venezuelan residents if the services rendered by the individual outside the country are on behalf of a foreign employer, then the remuneration received will not be taxable in Venezuela.

Taxation of investment income and capital gains

Are investment income and capital gains taxed in Venezuela? If so, how?

Capital gains on real property are taxable in Venezuela according to progressive tax table rates. The capital gains arising are added to total taxable income, subject to some special procedures. However, the gain may not be taxable if it results from the sale of the principal family residence, if the gain is reinvested in another principal home.

If a capital gain is produced through the sale of stock, the gain is added to total taxable income, which in turn is subject to general income tax as already described. Sale of stocks traded through the Venezuelan Stock Exchange will be subject to a 1 percent tax on gross proceeds only.

Dividends, interest, and rental income

Taxable dividends from Venezuelan domiciled entities would be the amount distributed equivalent to the accumulated earnings on financial statements not taxed at the corporate level. Special regulations exist to determine dividends source and imputation of the distribution. Moreover, taxable dividends from foreign entities would be the 100 percent of the dividend paid for residents, and it will be subject to a proportional tax rate of 34 percent.

The tax-withholding rate for dividends paid by a Venezuelan entity would depend on the payer’s activities, as follows:

  • 50 percent if the payer is a local company dedicated to hydrocarbons and related activities.
  • 60 percent for dividends related to companies receiving royalties and other similar participation on mining activities.
  • 34 percent if the payer is a Company engaged in other activities.
  • 34 percent if a company domiciled abroad pays dividends to domiciled entities/residents individuals in Venezuela.

Interest income obtained from savings account in local banking institutions is not taxable. Interest from foreign institutions would be taxable for Venezuela residents; they are added to the taxable income and taxed at the progressive tax rates.

Rental net income (expenses related activities are deductible) is included in the total taxable income. They are added to the taxable income and taxed at the progressive tax rates.

Gains from stock option exercises


Residency status Taxable at:
  Grant Vest Exercise
Resident N Y Y
Non-resident N Y Y
Other (if applicable) NA NA NA

Foreign exchange gains and losses

Foreign exchange gains and losses could be taxable and deductible when realized, depending on the nature of asset and liability and circumstances.

Principal residence gains and losses

Gain resulting from the sale of the principal family residence would not be taxable if the gain is reinvested in another principal home. Certain rules applies.

Capital losses

Losses resulting from sale of shares or participation quotas in the corporate stock and in the cases of liquidation or capital stock reduction of stock companies and taxpayers assimilated to stock companies shall only be admissible when the following circumstances concur.

  • The acquisition cost of the shares or participation quotas has not been higher than the quotation price in the Stock Exchange or than an amount that is reasonable when compared to the book value, if no quotation price exists.
  • The seller of the shares or stock quotas has owned such goods consecutively at least during two years as of the date of the sale.
  • The seller proves to the tax administration that the companies which shares or participation quotas have been sold performed an economic activity with a reasonable capacity during the last two tax years immediately before the year in which the sale that originated the loss was made.

Other capital losses should be admitted as long as the capital was income producing and taxable.

Personal use items



In Venezuela, taxes are imposed on the transmission of property to beneficiaries domiciled in Venezuela or to non-residents in respect of property located in Venezuela. Each taxable beneficiary must compute and pay tax on his/her inheritance or gift. Rates vary, depending on the amount of the inheritance or gift and on the degree of family relationship to the decedent or donor, from 1 percent to 55 percent.

Additional capital gains tax (CGT) issues and exceptions

Are there additional capital gains tax (CGT) issues in Venezuela? If so, please discuss?


Are there capital gains tax exceptions in Venezuela? If so, please discuss?

Tax treaties in few cases create tax exceptions in Venezuela.

Pre-CGT assets


Deemed disposal and acquisition


General deductions from income

What are the general deductions from income allowed in Venezuela?

There are some deductions that can be made from annual income.

Itemized deductions - individuals

  • Interest paid on loans for the purchase of principal house, up to 1,000 tax units or for home rental up to 800 tax units.
  • Payments to educational institutions in the country, for the education of the taxpayer and descendants up to 25 years of age.
  • Surgery, hospitalization, and maternity insurance premiums paid in the country.
  • Dental, hospitalization, and medical expenses of the taxpayer and its dependents paid in Venezuela.

The original documentation for said deductions should be available with the annual tax return.

The deductions mentioned above can only be taken by taxpayers classified as residents in Venezuela.
Alimony and child support payments are not allowed as deductions.

If the taxpayer decides not to use the itemized deductions, a standard deduction of 774 tax units can be used.

Income Tax Exoneration for Fiscal Years 2016

The Decree number 2,266 published on Official Gazette No. 40,865 dated March 9, 2016, established a partial exoneration for individuals’ residents in Venezuela. For the 2016 tax year the exemption remain in 3,000 Tax Units (e.g., Bs. 531,000.00 for fiscal year 2016). Individuals with late filing status will lose the possibility of using this income exoneration. 


Tax reimbursement methods

What are the tax reimbursement methods generally used by employers in Venezuela?

This would depend, employers in Venezuela always follows the policies for expatriation of the Parent Company. To avoid a monthly taxable income to the employee, the rollover method may result more beneficial.

Calculation of estimates/prepayments/withholding

How are estimates/prepayments/withholding of tax handled in Venezuela? For example, Pay-As-You-Earn (PAYE), Pay-As-You-Go (PAYG), and so on.

Tax withholding is performed in the monthly payroll. The employer is regarded by the Venezuelan tax authorities as a tax withholding agent and must withhold income tax to employees on a monthly basis.

For self-employee individuals, an estimated tax return may be required if the individual’s income exceeds 1,500 tax units in the preceding fiscal year from the following sources. 

  • commercial or credit activities
  • commercial practice of non-commercial professions
  • leasing or subleasing of real personal assets
  • participation in the net earnings of partnerships not subject to income tax.

Partnerships are exempt from the estimated tax requirement when their earnings are taxable on an individual basis for their partners.

Pay-as-you-go (PAYG) withholding

Not applicable.

PAYG installments

Not applicable.

When are estimates/prepayments/withholding of tax due in Venezuela? For example, monthly, annually, both, and so on.

  • Payroll: on a monthly basis.
  • Estimated tax return: before 30 June of the fiscal year.

Relief for foreign taxes

Is there any Relief for Foreign Taxes in Venezuela? For example, a foreign tax credit (FTC) system, double taxation treaties, and so on?

The Venezuelan Income tax Law provides for a double tax relief based on Foreign Tax Credit method.

In addition, Venezuela has subscribed tax treaties with the following countries: Austria, Barbados, Belarus, Belgium, Brazil, Canada, China, Cuba, Czech Republic, Denmark, France, Germany, Indonesia, Iran, Italy, Korea, Kuwait, Malaysia, the Netherlands, Norway, Portugal, Qatar, Russia, Spain, Sweden, Switzerland, Trinidad and Tobago, United Arab Emirates, United Kingdom, United States, and Vietnam, which contain the Foreign tax credit or the exemption method in order to reduce the double tax burden.

General tax credits

What are the general tax credits that may be claimed in Venezuela? Please list below.

The Venezuelan income tax law, provides certain tax credits against income tax for residents as follows:

  • 10 tax units for taxpayer.
  • 10 tax units for spouse.*
  • 10 tax units for each dependent under 25 years of age.*

*Applicable only if the spouse or dependents are resident in the country.

Sample tax calculation3

This calculation assumes a married taxpayer resident in Venezuela with two children whose three-year assignment begins 1 January 2014 and ends 31 December 2016. The taxpayer’s base salary is USD 100,000 and the calculation covers 3 years.

Salary 100,000 100,000 100,000
Bonus 20,000 20,000 20,000
Cost-of-living allowance 10,000 10,000 10,000
Housing allowance 36,000 40,000 40,000
Company car 1,800
Moving expense reimbursement 20,000 0 20,000
Home leave 0 5,000 5,000
Education allowance 3,000 3,000 3,000
Interest income from non-local sources 6,000 6,000 6,000

The exchange rate to be used by an individual would depend on each circumstances subject to technical evaluation.

Other assumptions

  • All earned income is attributable to local sources.
  • Bonuses are paid at the end of each tax year, and accrue evenly throughout the year.
  • Interest income from foreign banks is not remitted to Venezuela.
  • The company car is used for 70 percent for business and 30 percent private purposes and originally cost USD 50,000.
  • The employee is deemed resident throughout the assignment.
  • Tax treaties and totalization agreements are ignored for the purpose of this calculation.
  • The tax unit for such exercise were 127 for fiscal year 2014, 150 for 2015 and 177 for fiscal year 2016.

Calculation of taxable income

Year-ended 2014
Days in Venezuela during year
365 365 365
Earned income subject to income tax 6,3 6,3 580
Salary 630.000.00 630.000.00 58.000.000,00
Bonus 126.000,00
126.000.00 11.600.000,00
Cost-of-living allowance 63.000,00
63.000.00 5.800.000,00
Net housing allowance 226.800.00 252.000.00 23.200.000,00
Company car 11.340,00
11.340.00 1.044.000,00
Moving expense reimbursement - - 11.600.000,00
Home leave - 31.500.00 2.900.000,00
Education allowance 18.900,00
18.900.00 1.740.000,00 
Other income (Interest)
Total earned income
Tax Exception 3000 TU
Total income for Income Tax Return
Deductions (Housing +Education)
Total taxable income
Venezuelan Tax Thereon
Less: Personal deduction
Less: Tax deductions dependents (spouse + two
Total Venezuelan Tax 221.530,60 77.343,60 39.601.521,00

The example above shows the incomes received by the assignee in bolivars, we apply the exchange rate of 6,3 bolivars per dollar for fiscal years 2014 and 2015. For fiscal year 2016, the income were exchanged at the floating DICOM rate for purposes of this example.


1Certain tax authorities adopt an "economic employer" approach to interpreting Article 15 of the OECD model treaty which deals with the Dependent Services Article. In summary, this means that if an employee is assigned to work for an entity in the host country for a period of less than 183 days in the fiscal year (or, a calendar year of a 12-month period), the employee remains employed by the home country employer but the employee’s salary and costs are recharged to the host entity, then the host country tax authority will treat the host entity as being the "economic employer" and therefore the employer for the purposes of interpreting Article 15. In this case, Article 15 relief would be denied and the employee would be subject to tax in the host country.

2For example, an employee can be physically present in the country for up to 60 days before the tax authorities will apply the ‘economic employer’ approach.

3Sample calculation generated by Alcaraz Cabrera Vázquez, the Venezuelan member firm of KPMG International, based on the 2001 Venezuelan Income Tax Law (Official Gazette No.5.566 dated 28 December 2001) and its Regulation (Official Gazette No.5.662 dated 24 September 2003).


© 2013 Rodrguez Velazquez & Asociados, a Venezuela partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved. 

© 2016 Rodrguez Velazquez & Asociados, a Venezuela partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Connect with us


Request for proposal



KPMG's new digital platform

KPMG's new digital platform