The tax reform measures in Venezuela have been published in official gazette on 30th December 2015. Changes to the income tax law are effective from the beginning of January 2016. They include the following measures:
- The tax inflation adjustment used to determine the taxable income of special taxpayers is repealed;
- The income tax rate has been increased from 34% to 40% for banks and insurance companies;
- The investment tax credit provisions are repealed;
- Cash basis income is permitted only for salary income and windfall profits.
A new tax on financial transactions will be effective from early February 2016. Companies that are recognized as “special taxpayers” will be subject to this new 0.75% tax rate for bank withdrawals and bond or securities transfers excluding those issued by the Central bank or the government of Venezuela, debt payments not utilizing a bank account or clemency of debt.
