GLOBAL INDIRECT TAX
Venezuela Country VAT/GST Essentials kpmg.com
TAX
b | Venezuela: Country VAT/GST Essentials
© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
Venezuela: Country VAT/GST Essentials Contents Scope and Rates
2
Invoices
6
What supplies are liable to VAT?
2
What do I have to show on a tax invoice?
6
What is the standard rate of VAT?
2
Can I issue invoices electronically?
6
Are there any reduced rates, zero rates, or exemptions?
2
Is it possible to operate self-billing?
6
Registration
3
Transfers of Business
7
Who is required to register for Venezuelan VAT?
3
Are there penalties for not registering or late registration?
3
Is there a relief from VAT for the sale of a business as a going concern?
7
Are there any simplifications that could avoid the need for an overseas company to register for VAT?
3
Options to Tax
7
Are there any options to tax transactions?
7
VAT Grouping
4
Is VAT grouping possible?
4
Head Office and Branch Transactions
8
Can an overseas company be included in a VAT group?
4
How are transactions between head office and branch treated?
8
Returns
4
Bad Debt
8
How frequently are VAT returns submitted?
4
Am I able to claim relief for bad debts?
8
Are there any other returns that need to be submitted?
4
Anti-Avoidance
8
VAT Recovery
5
Can I recover VAT if I am not registered?
5
Is there a general anti-avoidance provision under VAT law?
8
Does your country apply reciprocity rules for reclaims submitted by non-established businesses?
5
Penalty Regime
9
Are there any items that you cannot recover VAT on?
5
What is the penalty and interest regime like?
9
International Supplies of Goods and Services
5
How are exports of goods and services treated?
5
How are goods dealt with on importation?
5
How are services which are brought in from abroad treated for VAT purposes?
5
All information reflected in this document was obtained/summarized from KPMG in Venezuela as of October 2011. © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
2 | Venezuela: Country VAT/GST Essentials
Scope and Rates What supplies are liable to VAT?
Are there any reduced rates, zero rates, or exemptions?
Value-added tax (VAT) is due on any supply of goods (except to real estate goods) or services made in the country. Supply includes all forms of supply. It is not restricted to the provision of goods and services by way of sale but can apply equally to other forms of transaction.
Zero Rates • exportation of goods and services are subject to a zero rate
Supply does not include anything not done for consideration. However, certain actions carried out without consideration are deemed to be supplies as a self-consumption; for example business gifts and private use of business assets. What is the standard rate of VAT? The standard rate applicable is 12 percent. The VAT rate will be adjusted on an annual basis with the budget law (Ley Presupuesto Anual). The yearly adjusted VAT rate must range between 8 percent and 16.5 percent.
•
sales of natural hydrocarbons performed from jointventures companies (empresas mixtas) to Petróleos de Venezuela, S.A. or any of its subsidiaries
•
allows tax recovery.
Reduced Rate • certain goods and services (such as red meat, animal oil, or domestic plane tickets), have temporary rate of 8 percent, until the budget law provides a different rate. Increased Rate • an increased rate of 19 percent (additional ten percentage points above the general rate) applies on luxury goods.
© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
Venezuela: Country VAT/GST Essentials | 3
Registration Exemptions • national transportation services of people, except from air travel tickets •
import under Andean Trade Preference Act (ATPA) regime
•
intangible assets
•
loans
•
banks and financial institutions operations except by leasing
•
insurance services
•
payroll
•
operations performed on duty free and tourist areas, such as Peninsula de Paraguaná, Mérida, Sta. Elena de Uairén, and Atuja
•
basic food elements, described on article 18 of the Law and its transportation. (Exceptions apply)
•
medicine
•
fertilizer
•
fuel
•
newspapers, books, magazines, and the paper to edit them
•
education
•
home electricity, water, natural gas.
Who is required to register for Venezuelan VAT? Venezuelan Entities If your business makes sales of taxable supplies in Venezuela you are required to file VAT returns, but no additional registration will be required. Foreign Entities Foreign entities are not required to assess VAT; in cases of import of goods and services the buyer is responsible for payment of VAT. Are there penalties for not registering or late registration? Not applicable. Are there any simplifications that could avoid the need for an overseas company to register for VAT? Not applicable.
© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
4 | Venezuela: Country VAT/GST Essentials
VAT Grouping
Returns
Is VAT grouping possible?
How frequently are VAT returns submitted?
No, each taxpayer pays it owns taxes, and there is no opportunity to offset credits and debits between taxpayers.
Local taxpayers are required to submit VAT returns on a monthly basis.
Can an overseas company be included in a VAT group?
Are there any other returns that need to be submitted?
Not applicable.
Withholding VAT returns must be filed every 15 days, that is twice a month.
© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
Venezuela: Country VAT/GST Essentials | 5
VAT Recovery
International Supplies of Goods and Services
Can I recover VAT if I am not registered?
How are exports of goods and services treated?
No, only local taxpayers are allowed to recover VAT.
Exports are subject to VAT at the 0 percent rate with the exporter being allowed to recover any VAT paid in order to produce or buy the goods or services exported.
Does your country apply reciprocity rules for reclaims submitted by non-established businesses? Information not available. Are there any items that you cannot recover VAT on? VAT exemptions do not allows VAT recovery, the amount paid as VAT becomes part of expenses and cost. Non-VAT taxpayers are not able to recover VAT.
How are goods dealt with on importation? When goods are imported into Venezuela, VAT and customs duties are due. They have to be paid or secured before the goods will be released from customs’ control. The VAT paid can be offset against the VAT charged by the acquirer on its VAT taxable operations, on its VAT return. How are services which are brought in from abroad treated for VAT purposes? In case of services, once the invoice is recorded in the accounting books, the VAT should be paid and can be offset against the VAT charged by the acquirer on its VAT taxable operations, on its VAT return. Additionally, the acquirer has to issue an invoice as partly responsible for the VAT generated by the import of services.
© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
6 | Venezuela: Country VAT/GST Essentials
Invoices What do I have to show on a tax invoice? •
the document must clearly establish if it is an invoice, credit note or other document
•
the quantity and nature of the goods/services supplied at each VAT rate
•
indication of any amount that is charged to the sale price (interest)
•
a sequential invoice number
•
a sequential tax control number (Número de Control)
•
indication of applicable discounts
•
total control number assigned to the company
•
total sales price taxed
•
invoices must be printed with at least one copy
•
the total amount of VAT payable
•
the name, address, and registration number of the supplier
•
•
tax registration numbers RIF
if the seller is not a VAT tax payer, the document must state, that no tax credit will be derived in that sale
•
the name, address, and registration number of the authorized printer, as well as the number of the printer’s tax authorization
•
if the sale is invoiced in the name of a third party, it must clearly be indicated in the invoices.
•
tax address of the head office in cases of permanent establishment
•
the date of issue of the document (DD/MM/YYY)
•
the name and address of the customer
•
tax registration numbers RIF of the costumer
•
the date of issue of the document related to good delivery if such was made prior to the invoice date
Can I issue invoices electronically? Yes. Invoices and equivalent documents may be issued electronically in two ways: printing forms acquired from authorized printer or using a tax computer. In addition, this can be done through secured hardware that cannot be accessed by anyone but the tax authorities.
Is it possible to operate self-billing? No.
© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
Venezuela: Country VAT/GST Essentials | 7
Transfers of Business
Options to Tax
Is there a relief from VAT for the sale of a business as a going concern?
Are there any options to tax transactions?
No, even in cases of liquidation, VAT would be applied on the assets returned to shareholders.
Real estate leases are taxed if they are used for commercial purposes.
© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
8 | Venezuela: Country VAT/GST Essentials
Head Office and Branch Transactions
Bad Debt
How are transactions between head office and branch treated?
Am I able to claim relief for bad debts?
If your head office makes a charge related to services to its branch or vice versa, this is not treated as a supply for Venezuelan VAT purposes, as both the head office and its branch are considered the same entity.
No relief for bad debts is established by Law, even though most of the companies claim them when they have all the supporting documentation. Another procedure applied by business is to issue a credit note against the invoices, to reverse VAT debits.
Anti-Avoidance Is there a general anti-avoidance provision under VAT law? There is a general anti-avoidance provision under the Venezuelan Organic Tax Code. In addition, VAT has its own rules.
© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
Venezuela: Country VAT/GST Essentials | 9
Penalty Regime What is the penalty and interest regime like? There are certain penalties for failing to fulfill formal obligations, some examples are as follows: Not filing returns 10 U.T. increases in 10 U.T. for each new action until 50 U.T. Filing late 5 U.T. increases in 5 U.T. until 25 U.T. Late payments 1 percent of the tax paid. Not withholding From 100 percent to 300 percent of the tax
Paying late withholding taxes 50 percent monthly to 500 percent of the tax Not use of the proper invoices 1 U.T. for each invoice up to 200 U.T. Company close from one to five days if penalty is over 200 U.T. in one period Non-having sale and purchased book 50 U.T. increase in 50 U.T. until 250 U.T. Company close for three days Having purchases and sales book improperly 25 U.T. increase in 25 U.T. up to 100 U.T. Company close by three days
For withholding less than the proper amount From 50 percent to 150 percent of the tax
© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved.
www.kpmg.com
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Designed by Evalueserve. Publication name: Venezuela – Country VAT/GST Essentials Publication number: 111202 Publication date: January 2012