Legal report
Provision establishing the provisions to enjoy the exemptions on the Tax on Financial Transactions on Legal Persons and Economic Entities without Legal Personality.
Last Tuesday November 13, 2007, the aforementioned Provision by the National Integrated Customs and Tax Administration Service (SENIAT) was published in O.G. No. 38809, for the purposes of regulating the enjoyment of exemptions established in article 9 of the Decree with Rank, Value and Force of Tax Law on Financial Transactions on Legal Persons and Economic Entities without Legal Personality (LITF).
- Exemption by the Republic, other territorial political entities and the Central Bank of Venezuela (BCV):
SENIAT shall electronically issue the list of benefited entities to the banks and other financial institutions (the presidency, vice-presidency, ministries, autonomous services, the National Assembly, the courts of the Republic, the office of the Attorney General, the comptroller’s office, local government offices and mayors´ offices among other entities) and their corresponding Sole Tax Information Registry number (RIF).
- Public entities with or without corporate purposes:
Must go to the regional management department, unit or sector corresponding to their tax address for the purposes of updating their RIF and comply with the formalities and requirements set forth in the following portal: www.seniat.gov.ve
- Community Councils and other community organizations foreseen in the Law on Community Councils:
- Community Councils and Community Banks: SENIAT shall electronically issue the list of banks and other financial institutions, identifying them with their corresponding RIF number.
- Community Organizations: The exemption shall be enforced only on debits or withdrawals from accounts in their name so long as said accounts receive funds exclusively from the community councils. For said purposes, said organizations must open an account at the same bank or financial institution that has the funds managed by the community bank, which shall only accept credits from these.
- Residential use condominiums:
The benefit shall be applicable exclusively to residential-use condominium committees so long as the bank accounts are in their names and are solely destined to the administration of the condominium.
For said purposes, the condominium committees must go to the regional management department, unit or sector corresponding to their tax address to update their RIF and comply with the formalities and requirements established in the tax authority portal.
- The purchase, sale and transfer of securities:
The provision clarifies that the benefit is applicable on the purchase, sale and transfer of securities issued or endorsed in full or in part by the republic or the Central Bank of Venezuela, as well as bonds issued or endorsed by public entities with corporate purposes created by the republic and on the debits or withdrawals related to the liquidation of capital or interest thereon. The exemption also applies to securities negotiated at the agricultural bourse and the stock exchange.
The acquirers must however present at the banks and other financial institutions, as the case may be, the following papers:
1. A certificate issued by the brokers authorized to carry out operations at the stock exchange, stating the number of the operation assigned by the corresponding stock exchange, the securities negotiated, the broker or mediator, the amount of the operation and the purchaser of the securities; accompanied by the corresponding transaction certification issued by the corresponding stock exchange.
2. A certificate issued by the brokers duly authorized to carry out operations at the agricultural bourse, statingthe number of the operation assigned, the contracts negotiated on agricultural products, the amount of the operation and the purchaser of the respective contracts; accompanied by the correspondingtransaction certification, issued by the agricultural bourse.
3. A sworn deposition stating that the debit to the account was carried out exclusively for the purchase of securities or bonds issued or endorsed by the republic or the Central Bank of Venezuela, accompanied by confirmation of transfer of the securities issued by the brokers or mediators.
In turn, the local stock exchange, agricultural bourse and authorized stock exchange brokers must inform SENIAT on the accounts to be used to process the acquisition operations on these securities, swearing under oath that they shall be destined solely to undertaking the abovementioned operations.
- Exempted Operations conducted through accounts kept by banks and financial institutions at the BCV:
Overnight Operations |
Intra-Day Operations |
Clearing Differences |
Maturity of Overnight Capital |
Purchase of public bonds in the secondary market |
Maturity of capital on Intra-day loans |
Transfer among accounts of one same holder in the same or different financial institutions |
Housing policy payments |
Maturity of Overnight Interest |
Maturity of Interest on Intra-day loans |
Reimbursement to the National Treasury – Art. 114 of LOAFSP |
Reimbursement to the National Treasury– Payment Orders |
Payment of Interest and Capital on account of DPN |
Liquidation of Automatic Teller Machine Operations |
Withdrawal of matured securities endorsed by the republic or the Central Bank of Venezuela (BCV) |
Reimbursements to mayors and local government offices |
Automatic Teller Machine Network Clearing Liquidations |
Collection of National Funds |
Cash withdrawals |
Consignment cash withdrawals |
Missing differences in unsuitable deposits |
Swap Operations with the Central Bank of Cuba |
Liquidity absorption operations (sale of securities with a certificate of deposit repurchase and/or sale pact) |
Resale of securities issued by the republic due to maturity of the purchase operation |
Opening of term certificates of deposit at the BCV – SET. |
Resale of securities issued by the national government and/or CD due to maturity of the purchase operation with resale pact (SET) |
Purchase of Treasury bonds by financial institutions. |
Purchase of DPN bonds by financial institutions. |
Massive sale |
Primary placement – Monetary authority |
Cash withdrawals |
Consignment cash withdrawals |
Missing differences in unsuitable deposits |
Swap Operations with the Central Bank of Cuba |
Liquidity absorption operations (sale of securities with a certificate of deposit repurchase and/or sale pact) |
Resale of securities issued by the republic due to maturity of the purchase operation |
Opening of term certificates of deposit at the BCV – SET. |
Resale of securities issued by the national government and/or CD due to maturity of the purchase operation with resale pact (SET) |
Purchase of Treasury bonds by financial institutions. |
Purchase of DPN bonds by financial institutions. |
Massive sale |
Primary placement – Monetary authority |
- Registration of Exemptions:
Refers to the electronic marking by SENIAT on the taxpayers´ RIF in the cases in which the exemption is applicable based on the beneficiary’s conditions.
The banks and other financial institutions designated as tax collection agents must electronically collect the exemption records every day and send confirmation of collection thereof. They are also in the obligation of identifying all exempt operations in their systems, as well as the exemption records as soon as they have been collected.
Since its publication in Official Gazette on 11/13/2007.
Francisco A. Rey Silva
Analysis and Information Department
frey@venamcham.org
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