Venezuela: Tax law changes effective in 2016, financial transaction tax

Venezuela: Tax law changes effective in 2016

Changes to the income tax law in Venezuela are effective beginning January 2016, and include the following measures.

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  • Repeal of the “tax inflation adjustment” (used to determine the taxable income of “special taxpayers” as defined generally to include most companies and some individuals)
  • An increase in the income tax rate—from 34% to 40%—applicable for banks and insurance companies
  • Repeal of investment tax credit provisions
  • Cash basis income recognition is allowed only for salary income and windfall profits

These tax reform measures were published in the official gazette No. 6.210 (30 December 2015). 

Financial transaction tax, effective February 2016

A new tax on financial transactions will be effective beginning February 2016. Companies that are identified as “special taxpayers” will be subject to this new tax, that is imposed at a rate of 0.75% of the value or amount of certain financial transactions, including:

  • Bank withdraws
  • Transfers of bonds and securities (except of those issued by the Venezuelan Central Bank or the government of Venezuela)
  • Payments of debts not utilizing a bank account
  • Forgiveness of debt

This new law was published in the official gazette No. 6.210 (30 December 2015). 

 

For more information, contact a KPMG tax professional in Venezuela:

Carlos Adrianza | cadrianza@kpmg.com

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