There are a number of taxes which are applicable to individuals in Venezuela. If a person has spent more than 183 days in the country in the previous tax year then they are considered to be residents. Expatriates are subject to the same regulations as Venezuelan residents provided they are in the country for more than 183 days in the tax year. Residents pay tax on income from all sources, whether it is within the country or abroad. Non-residents pay a flat rate of 34%.

Those who pay taxes on income that comes from more than one country may find that they are expected to pay tax in two countries on the same income. In this case a tax credit can be applied for, but the worker will be expected to produce receipts or provide other proof that they have already paid tax on the monies elsewhere. There are a number of tax treaties in place that can help to prevent this from happening, but these treaties also mean that there are agreements in place to share information on expat workers with other countries. As well as protecting the interest of the worker they are also designed to ensure that nobody can evade their tax liability. If you are unsure where you will stand on income earned in your home country, it is a good idea to check with your local tax office before moving to Venezuela for details on your tax liability there.

Taxable income is considered to be salaries and other earnings for work and capital gains. There are a number of types of income that are exempt from taxation and these include interest on savings, redundancy pay, social security benefits, donations to charity and retirement payments.

Tax rates range from 6% to 34% and there are some specific regulations for expatriate workers. If an expat receives monies from their employer towards accommodation costs then it is considered to be part of their salary and is counted towards their tax liability. The same applies if an employer provides a vehicle for the worker. Some employers will make a contribution towards the cost of educating their workers children, and these contributions are considered to be income and will be taxable, even though there is an allowance for this on the income tax return which will cancel out the tax liability. Relocation expenses may be considered to be part of the salary if it is given to the employee and is over and above reasonable moving expenses. If the employer simply picks up the bills then it is not considered to be taxable. There are cost of living allowances which may be paid to expatriate workers and these are part of the income. Capital gains on the sale of shares are taxed at a flat rate of 1% while other types are taxed at the standard income tax rate.

Items that can be deducted from tax liability include education costs, interest on insurances and healthcare costs. There are also reasonable work expenses which can be deducted, such protective work clothing, office equipment and other items which are essential for carrying out work, although this applies mainly to those who are self employed.

VAT is payable at a rate of 12% and this is applied to a number of goods and services. Basic food items, public transport, healthcare costs and education costs are all exempt from VAT. Other taxes that may be applicable include inheritance tax, which is taxed at progressive rates up to 55%. This also takes into consideration the relationship between the benefactor and the beneficiary. There are no wealth taxes applicable in the country.

Workers will have their social insurance contributions deducted from their salaries and workers will pay 4% while the employer will pay between 9 and 11% depending upon the level of salary. A further deduction of 0.5% is taken for the employment benefit system and the employer adds a further 2%.

Tax returns must be filed by the end of March each year for the previous year. Returns are done on a self assessment method and investigations are common if there are any discrepancies. Tax returns can be filed jointly for married couples and there are no special allowances for children. A return which has been filed late can lead to fines. The tax office is known as the SENIAT and they do have some information available in English if required.