Venezuela’s Organic Hydrocarbons Law was reformed on 31 January 2026, introducing a new 15% tax and updated royalties of up to 30%. Legacy taxes are repealed, exemptions are granted, and existing projects receive a 180-day transition period.
Venezuela issued the Reform of the Organic Hydrocarbons Law in Extraordinary Official Gazette No. 6,978, dated 31 January 2026, on 29 January 2026.
Key tax reforms are summarised as follows:
Integrated hydrocarbons levy
A new levy on hydrocarbons will be applied to monthly gross revenues, with rates reaching up to 15% and adjustable for each individual project.
Hydrocarbon royalties
Rules governing state hydrocarbon royalties have been updated, allowing rates of up to 30%. The National Executive may set the initial rate for each project and adjust it as needed to ensure a project’s “economic balance.”
State-Owned Firms to Withhold Royalties and Hydrocarbons Tax
State-owned enterprises and their subsidiaries will serve as withholding or collection agents for royalties and the integrated hydrocarbons tax on contracts related to the development of primary activities.
Repealed taxes
Several taxes that were previously imposed under the former hydrocarbons law and other sector-specific legislation have now been repealed. These include the surface tax, own consumption tax, general consumption tax, extraction tax, export registration tax, windfall tax, and shadow tax.
Exemptions
The law provides relief from state and municipal taxes, as well as from social responsibility obligations under the Public Procurement Law. It also exempts entities from certain taxes and contributions, including the net worth tax, the special contribution under the Organic Law on Science, Technology, and Innovation, the special contribution under the Organic Law on Sports, Physical Activity, and Physical Education, the special contribution under the Organic Law on Drugs, and the contribution for the protection of social security pensions.
The tax provisions take effect 60 days after the law is published, while existing projects continue under the current regime for a 180-day transition period.
