Decree 1,808, published in the Official Gazette of 12 May 1997, introduced amendments to the withholding tax regulations, which replace the former regulations in Decree 1,344 of 27 June 1996. The main changes are:

  • the multiplier for calculating the abatement of the withholding tax on payments to resident individuals was changed to 83.3334 (formerly 141.666);
  • payments to nonresident legal entities for the leasing of movable property are now subject to a final withholding tax of 5% (formerly subject to corporate income tax at progressive rates);
  • a new formula was introduced to calculate the amount of withholding tax on payments by credit card enterprises for the supply of goods and services. The formula is designed to exclude VAT from the taxable base subject to withholding;
  • payments to financial lessors for the leasing of immovable property are no longer subject to withholding tax;
  • proceeds from transfers made outside the stock exchange of shares and interests in resident companies are subject to withholding tax. The withholding tax rate for nonresident corporate transferors was reduced to 5%; and
  • a procedure is established for situations in which the payments subject to withholding tax are made through an international organisation (e.g. World Bank, Inter-American Development Bank, IMF) to Venezuelan public entities.

The amendments also clarify that payments for advertisement services are subject to withholding tax, whether the payments are to resident individuals or resident or nonresident entities (formerly the decree only referred to resident entities).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information contact Deirdre Silberstein, Washington, on +1 202 955 4000 or enter a text search "Deloitte & Touche" and "Business Monitor".