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General VAT rate of on transactions paid through electronic means

The President of the Republic issued  Decree No. 3.085 of September 19, 2017, published in Official Gazette No. 41.239 of September 19, 2017 (the “Decree”). The Decree established a reduction of the general Value Added Tax (“VAT”) rate applicable to transactions paid through electronic means.

The 9% general VAT rate will be imposed on the sales of personal property  and provision of services to natural and legal persons for up to the amount of Bs. 2,000,000.00,  provided that such sales or provision of services are paid only through electronic means.

The Decree also established that the sales of personal property  and provision of services  to natural and legal persons for amounts exceeding Bs. 2,000,000.00 will be taxed with a  7% general VAT rate, always provided that such sales or provision of services are paid only through electronic means.  

If the aforesaid transactions are paid through non-electronic means, the general rate prescribed in article 62 of the Decree with the Status, Value, and Force of the Law that Establishes the Value Added Tax will be applied, that is, 12%.

The reductions of the rate to which the Decree refers will not apply if the electronic payment method coexists with any other form of payment.   

The following transactions are excluded from the rate reductions established in the Decree:

1. The acquisition of goods and services with the VAT received.

2. The final importation of personal property.

3. The acquisition of metals and precious stones. The following are understood as metals and precious stones:  gold, including gold plated with platinum,  unrefined, semi-manufactured gold or gold dust; silver; platinum, which comprises iridium, osmium,  paladino,  rhodium, and ruthenium; precious metal alloys; precious stones;  and diamonds, including  worked, not mounted, not set, or unsorted diamonds).

 

The Decree will become effective upon the elapsing of five (5) business days  following its publication in the Official Gazette of the Bolivarian Republic of Venezuela (that is, September 27, 2017)  and will be in force until December 31, 2017.

 

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.”