Executive Decree Enacting the Tax on Large Financial Transactions.

BENSON, PEREZ MATOS, ANTAKLY & WATTS

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TAX REPORT

Caracas, January 5, 2019

Decree with Rank, Value and Force of Law that Establishes a Tax on Large Financial Transactions

A Decree with Rank, Value and Force of Law to Tax Large Financial Transactions was published in Official Gazette No. 6,210, Special Issue, dated December 30, 2015. This is a variation of the so-called Bank Debit Tax, aimed at bank transactions carried out by special taxpayers, as provided for in the text of the regulation.

The taxed events provided for are as follows:

        1. Debits made to bank accounts or any sort of sight deposit or financial instrument made in banks or other financial institutions.
        2. Assignment of checks or any other negotiable instrument starting from the second endorsement.
        3. Purchase of cashier’s checks in cash.
        4. Active transactions carried out by financial institutions among themselves with terms longer than two banking days.
        5. Transfer of valuables under custody among several holders.
        6. Payment of debts without the mediation of the financial systems.
        7. Debits to account that make up private organized payment systems that are not operated by the Central Bank of Venezuela and are different from the National Payment System.
        8. Debits into account for trans-border payments.

The Decree states that the tax administration may appoint those who take part in actions or transactions as tax withholding or collection agents for which they are capable of making themselves, or through an agent, the withholding or collection of the tax.

The rate was set at 0.75% on the total amount of each debit into account or taxed transaction. The period to make the charge is one day and the charge must be declared as per the following rules:

  1. Tax charged to debits made to bank accounts or other financial institutions: Everyday.
  2. Tax charged on payments of debts without the mediation of banks or other financial institutions: pursuant to the special taxpayers’ schedule for paying in value added tax withholdings

The tax administration shall issue the regulations for declaring, paying and collecting this tax.

As provided for by this Decree, the tax will not be income-tax deductible and shall become effective as of February 1, 2016.

We encourage you to contact us in case you have any specific questions on this matter.

Yours truly,

BENSON, PÉREZ MATOS, ANTAKLY & WATTS

Ysabel N. Figueira G.

All rights reserved. This work is a contribution of BENSON, PEREZ MATOS, ANTAKLY & WATTS to its clients on legal topics of their interest for purposes of providing orientation. It must not be interpreted as a specific legal opinion.

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