|D'Empaire Reyna Abogados|
|Mendoza, Delgado, Labrador & Asociados|
|Norton Rose Fulbright|
As Venezuela faces the worst economic crisis in its history, corporate transactions have almost come to a complete stop. Reports show that Venezuela's imports have plunged by around 40%, and that there is nearly no oil being exported. For a country that relies heavily on this export, times are hard, and the government's focus is on repairing the economy. This has contributed to the transfer pricing market remaining stable over the past year.
"The market is pretty static because the economy is very depressed," said Carlos Fernández-Smith, co-head of tax at Norton Rose Fulbright. "There are no big transactions in the market, and little investment, with a couple of exceptions."
While other countries are engaging heavily with the OECD's BEPS project, practitioners say that little has happened in Venezuela with regards to the project. Venezuela is not a member of the OECD, and the country has not committed to following the BEPS recommendations. "My impression is that we will eventually adopt some of the guidelines, but we're not actively engaging with them like some of the other countries," said Fernández-Smith.
Venezuela's tax authority, Servicio Nacional Integrado de Administración Aduanera y Tributaria (SENIAT), has over the past few years been active in its auditing of transfer pricing policies, and this trend continued in 2016.
"The tax authorities are aggressive because Venezuela is facing problems and the government, including the treasury department, wants to raise the country's revenue," said Bernardo Solano, senior partner at BaseFirma.
Fernández-Smith said that the overall attitude of the authorities had not changed significantly over the past year. However, two tax reforms in 2013 and 2015 have contributed to making it easier for the tax authorities to audit companies.
"They [the tax reforms] tend to be more stringent and give more power to the tax authority to increase tax collection," said Fernández-Smith. "The tendency is for the government to have legislation that increases tax collection and limits the rights of taxpayers rather than the other way around."
Servicio Nacional Integrado de Administración Aduanera y Tributaria
Torre Capriles, Plaza Venezuela, Caracas
Tel: +58 212 709 2888/709 2064/709 2027
(As of April 2016)
|Corporate income tax rate||34% (a)|
|Capital gains tax rate||34% (a)|
|Branch tax rate||34% (a)|
|Interest paid to residents|
|Paid to non-residents|
Net operating losses (years)
Source: EY 2016 Worldwide Corporate Tax Guide