🔢General aspects
The impact of the IGTF on cryptocurrency transactions
Background
On February 01, 2016, the Law of Tax on Large Financial Transactions, published in the Extraordinary Official Gazette of the Bolivarian Republic of Venezuela No. 6. 210, dated December 30, 2015, which established that financial transactions carried out by Legal Entities (PJ) and Economic Entities without Legal Personality, qualified as "Passive Subjects" by the National Integrated Tax Administration Service (SENIAT), would be subject to withholding of 0.75% on debits or withdrawals made in their financial accounts.
Legal Basis
In the Extraordinary Official Gazette of the Bolivarian Republic of Venezuela No. 6,687, dated February 25, 2022, the Law of Partial Reform of the Decree with Rank, Value and Force of Law on the Tax on Large Financial Transactions ("IGTF") was published, which became effective thirty (30) days after its publication.
Relevant aspect
Taxing all capital outflows.
Difference with the 2015 Law Applicability for payments in foreign currency or in Cryptos other than Petro.
Scope
The Large Financial Transactions Tax (IGTF) is a tax applicable to large financial transactions, aimed at Natural Persons (PN), Legal Entities (PJ) and Economic Entities without legal personality that are not qualified as "Special Passive Subjects" that make payments in currency other than legal tender or in cryptoassets other than those issued by the Bolivarian Republic of Venezuela.
Of the Taxable Event
Debits in bank accounts, correspondent accounts, deposits in custody or in any other kind of demand deposits, liquid asset funds, fiduciary and other financial market funds or in any other financial instrument, made in banks and other financial institutions.
The assignment of checks, securities, deposits in custody paid in cash and any other negotiable instrument, as of the second endorsement.
The acquisition of cash management checks.
The active operations carried out by banks and other financial institutions among themselves, and that have terms of no less than two (02) banking days.
The transfer of securities in custody between different holders, even when there is no disbursement through an account.
The cancellation of debts made without the mediation of the financial system, by payment or other means of extinction.
Debits in accounts that make up private organized payment systems, not operated by the Venezuelan Central Bank and different from the National Payment System.
Debits in accounts for cross-border payments.
Taxable Event: Situation that originates the birth of a tax obligation.
Art. 3 of the Law of Partial Reform of the Decree with Rank, Value and Force of Law of Tax on Large Financial Transactions ("IGTF"), published in the Extraordinary Official Gazette of the Bolivarian Republic of Venezuela No. 6,687, dated February 25, 2022.
Special Taxpayers
The category of taxpayer known as "Special Taxpayer" is established in Administrative Ruling No. SNAT/2007/0685 of the National Integrated Customs and Tax Administration Service (SENIAT) dated November 6, 2006 and published in Official Gazette No. 38,622, dated February 8, 2007.
Who are the Special Subjects according to the regulation?
Regions | Type of Person | IG Annual | IG Monthly |
---|---|---|---|
Capital | PN | 15.000 UT | 1.250 UT |
Capital | PJ | 120.000 UT | 10.000 UT |
Other regions | PN | 7.500 UT | 625 UT |
Other regions | PJ | 30.000 UT | 2500 UT |
Annual GI: Gross annual income declared in the last income tax return.
Monthly GI: Monthly gross income declared in any of the last six (6) VAT returns.
Who are the taxpayers of this tax?
Legal entities qualified as "Special Taxpayers" for payments made from their accounts in banks or financial institutions.
Legal entities qualified as "Special Taxpayers" for payments made without the mediation of financial institutions (cash, compensation, novation, remission).
Legal entities related to a legal entity that is a "Special Taxpayer" for payments made from their bank accounts or without the mediation of financial institutions.
Individuals and legal entities that make payments on behalf of a PJ (Special Taxpayer), charged to their bank accounts or without the mediation of financial institutions.
Individuals and legal entities for payments made in foreign currency, within the national banking system, without the intermediation of a foreign banking correspondent (Exchange Agreement No. 1).
Individuals and legal entities for payments made in foreign currency or crypto-assets, to "Special Taxpayers" (individuals or legal entities), without the intermediation of financial institutions.
Novation: Substitution of one obligation for another granted, so that the first one is annulled.
Compensation: A mode of extinction of obligations that operates when two persons are respectively creditor and debtor of each other. By virtue of set-off, the two obligatory relationships are reciprocally extinguished, up to the amount of the lesser of the two.
Condonation: A legal act by which a creditor expresses its willingness to extinguish all or part of its right, without receiving anything in return.
Art. 6 of the Law of Partial Reform of the Decree with Rank, Value and Force of Law of Tax on Large Financial Transactions ("IGTF"), published in the Extraordinary Official Gazette of the Bolivarian Republic of Venezuela No. 6,687, dated February 25, 2022.
To whom does it apply?
This tax applies to both Special Taxpayers and Consumers (difference with the 2015 regulation).
The "Special Taxpayer" must take into account two cases:
If their payments or purchases are doing it through the Bank (National Banking System); or.
If their payments or purchases are being made outside the Bank (National Banking System).
In case No. 1, whether in Bs. or in foreign currency, the Bank is responsible for collecting, calculating and declaring it before the SENIAT and paying it.
In case No. 2, the responsible party is the "Special Taxpayer", that is to say, that special taxpayer is the one who calculates and declares before the SENIAT that percentage.
On the other hand, the "Consumer" must take into account two things:
To whom does he/she buy?
and To whom does he/she pay?
If a "Special Taxpayer" is paid by the bank, the responsible party is the bank because it would be in charge of that payment, that is to say, it calculates it, declares it and pays it.
If a "Special Taxpayer" is paid without the intervention of the bank (Foreign Exchange or Cryptocurrencies), the responsible is the "Special Taxpayer" who sells, because he/she must calculate it, collect it and pay it to the tax authorities.
Tax Rate
The tax rates vary depending on the operation and if the subject who performs it is a "Special Taxpayer" or not.
Two percent (2%), if in Bs. or Petros.
Three percent (3%) if in Foreign Currency or Cryptocurrencies other than Petro.
Art. 13 of the Law of Partial Reform of the Decree with Rank, Value and Force of Law of Tax on Large Financial Transactions ("IGTF"), published in the Extraordinary Official Gazette of the Bolivarian Republic of Venezuela No. 6,687, dated February 25, 2022.
Cases in which the IGTF is not applicable
On payments to SENIAT (National Treasury) made directly through the bank or cashier's checks requested for payment.
On foreign exchange transactions (Exchange Agreement No. 1) made through the National Bank, i.e., purchase and sale of foreign currency and TDD in foreign currency passed through points of sale of the National Bank.
Exemptions
The Republic.
The BCV.
Public entities of a public nature, whether for profit or not-for-profit, classified as Special Liability Entities.
Exchange operations carried out by a duly authorized exchange operator
The first endorsement made on checks.
Debits generated by the purchase, sale and transfer of custody in securities issued or guaranteed by the Republic or the BCV.
Transfers of funds between accounts of the same holder.
Debits in current accounts of diplomatic missions.
Debits in current account of checks for payment of taxes to the National Treasury.
Debits to bank clearing house accounts.
Purchase / sale of cash in the single account maintained by the BCV.
Items No. 5 to 11 apply EXCLUSIVELY for transactions in legal tender (Bs.) or in Petros.
Art. 8 of the Law of Partial Reform of the Decree with Rank, Value and Force of Law of Tax on Large Financial Transactions ("IGTF"), published in the Extraordinary Official Gazette of the Bolivarian Republic of Venezuela No. 6,687, dated February 25, 2022.
Declaration and payment of IGTF
The "Special Taxpayers" must declare and pay the IGTF collected in accordance with the VAT withholding payment schedule.
Article 16 of the IGTF Law and Article 32 of Administrative Ruling SNAT/2022/000013.
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