Organic Law of Science, Technology, and Innovation
Decree No. 1,411 of November 13, 2014 was published in Official Gazette Extraordinary No. 6,151 of November 18, 2014. Through said Decree, the President of the Republic issued the Decree with the Status, Value, and Force of Law of Amendment to the Organic Law on Science, Technology, and Innovation (the “Decree-Law”), which amended the Organic Law on Science, Technology, and Innovation published in Official Gazette No. 39,575 of December 16, 2010.
Following are the most significant changes included in the Decree-Law:
1. The National Fund for Science, Technology and Innovation (Fondo Nacional para la Ciencia, Tecnología e Innovación - “FONACIT”), an entity assigned to the national authority with competence over science, technology, innovation and their applications, is the entity responsible for the administration, collection, control, auditing, verification, and quantitative and qualitative determination of the contributions to science, technology and innovation and their applications.
2. Gross income is defined as the income, revenue, and funds that the contributors receive on a customary, occasional or extraordinary basis, for any activity performed by them, provided that they are not bound to refund them for any cause whatsoever, without admitting any kind of costs or deductions.
3. If the contributor concurrently develops several activities, its contribution will be calculated by applying the percentage or share corresponding to the activity that generates the highest gross income.
4. It is confirmed that the contributions to science, technology and innovation will be calculated, paid, and declared before FONACIT during the second quarter after the end of the relevant fiscal year.
5. The persons who, by reason of their public functions or private activities, intervene in transactions related to the activities taxed by the Decree-Law may be designated by FONACIT as parties responsible for the payment of the contributions, in the capacity as withholding or receiving agents.
6. Two (2) articles related to the possibility for the taxpayers of presenting projects for having access to the resources from the contributions and from the annual plan of investment in science, technology and innovation and their applications were deleted.
7. New powers are established for FONACIT: (i) to collect the resources derived from the contributions; (ii) to carry out the verification, auditing and determination procedures to verify the performance of the obligations established in the Decree-Law; and (iii) to designate persons to be responsible for the payment of the contributions as withholding or receiving agents.
8. The elements that constitute the patrimony of FONACIT now include 5% of the income from the annual collection established in the Decree-Law.
9. It is established that the Board of Directors is the highest hierarchical entity of FONACIT and the powers of the same are prescribed.
10. The provisions of the Organic Tax Code will be applied to the contributors that fail to comply with or violate the Decree-Law, as well as in the cases of unlawful acts resulting from the failure to comply with formal and material duties.
11. The National Executive is allowed a period of one (1) year as from the publication of the Decree-Law in the Official Gazette in order to issue the necessary regulations.
12. Number 4 of article 2 and article 8 of the Partial Regulations to the Organic Law on Science, Technology, and Innovation, published in Official Gazette No. 39,795 of November 8, 2011 and referred to the contributions, to the financing and its result, and to ethics in research, technology and innovation are repealed.
The Decree-Law became effective on November 18, 2014.
In order to access the Decree, please click here.
“NOTE: THIS INFORMATION SHOULD NOT BE CONSTRUED AS LEGAL ADVICE ON ANY SPECIFIC MATTER AND ITS CONTENT ARE INTENDED AS A MANAGEMENT ALERT AS TO CURRENT DEVELOPMENTS IN VENEZUELA, ANY SPECIFIC LEGAL QUESTIONS REGARDING THE POSSIBLE APPLICATION OF NEW OR PROPOSED LEGISLATION TO PARTICULAR SITUATIONS SHOULD BE ADDRESSED TO TRAVIESO EVANS ARRIA RENGEL & PAZ.”