Many voices on the different social networks have been asking whether the national government intends to grant some kind of tax relief during the current State of Alarm, put in place via Decree No. 4,160 dated March 13, 2020 and published in Official Gazette Special Issue No. 6,519.

A number of organizations have been urging the government to do so, among others the Federation of Venezuelan Associations of Public Accountants, the Caracas Chamber of Commerce, and the Venezuelan Tax Law Association, especially as we see that several other countries have been granting postponements and tax benefits given the fact that, in the opinion of many experts, the economic impact of this epidemic is likely to be even greater than the health impact. 

In the case of taxation per se, Article 85 of the Tax Code lists a number of reasons for offering relief from tax obligations, among others acts of God and force majeure. 

Acts of God are defined as events that either could not be foreseen or, although foreseeable, could not be prevented.  Force majeure, in turn, is an event that can neither be anticipated nor prevented. 

Under Decree No. 4,160, one of the measures that the National Executive may take is to suspend activities in specific geographical areas, including workplace activities, that cannot be carried out remotely. In the case of many companies tax returns can only be filed from corporate headquarters given the need for access to the accounting information necessary to determine the taxes payable. In our opinion the fact that those in charge of these records are unable to get to their workplace, due to this worldwide contingency and the risk of exposure to the disease, should be considered a force majeure event that prevents them from performing their obligation, thus releasing them from their obligation from the very moment the State of Alarm was decreed. Another important point to be made is that, so long as economic activities are suspended under the State of Alarm: a) there will be neither income nor payments going out; b) there will be no liquidity and banks will not be providing cash or credit; and c) these companies’ priority will be to meet their payroll, which also affects tax obligations. 

We here at the firm would be pleased to provide any legal assistance needed regarding this issue or any other that may arise as a result of this pandemic and its consequences.

Ysabel Figueira