The amended Value Added Tax Law was published on July 9 2002 (Official Gazette 37,480).

The most important amendments are as follows:

  • The definition of 'services' that are subject to value added tax (VAT) is widened to include leases or similar contracts on immovable assets for non-residential purposes.
  • The requirements for qualifying as a taxpayer are abolished. Previously, a minimum amount of income had to be generated from taxable transactions in order for an individual to be considered a standard taxpayer for VAT purposes. Under the new law, any individual or legal entity that carries out taxable transactions will be considered to be a taxpayer, regardless of the income received from such transactions.
  • The international transportation service is considered to be partially applicable in Venezuela. Accordingly, a 15% VAT rate will apply to 50% of the value of freight and tickets.
  • An additional 10% tax rate is levied on the import or sale of certain luxury goods.
  • The tax administration is entitled to disregard the execution of agreements, the incorporation of legal entities, and the use of forms or procedures by the taxpayer when such acts result in a reduction of the amount of VAT payable.
  • The applicable regime for the recovery of VAT credits for the export sales of local goods and services is amended. A future regulation will determine the procedures and requirements to be followed by taxpayers for such recovery.

The amended law took effect on August 1 2002 except for Articles 43 and 44 concerning the VAT credit recovery procedure, which will take effect in October 2002.

For further information on this topic please contact Oswaldo Anzola at Rodriguez & Mendoza by telephone (+58 212 285 4113) or by fax (+58 212 285 7828) or by email ([email protected]).