Exoneration from income tax on the income obtained from the liquidation of capital, interest, or yields of the investments in bonds or similar securities issued and guaranteed by the Central Bank of Venezuela

Exoneration from income tax on the income obtained from the liquidation of capital, interest, or yields of the investments in bonds or similar securities issued and guaranteed by the Central Bank of Venezuela.

  The Presidential Decree Nº 4685 was published in Official Gazette Nº 42371 of May 6th, 2022. This Decree exonerates bond holders, individuals and legal entities residing or domiciled in the Bolivarian Republic of Venezuela, from paying Income Tax on their income from the liquidation of capital and interest or yields of the investments made in bonds or similar securities issued and guaranteed by the Venezuelan Central Bank. Please find below the most relevant aspects of this Decree:   Income tax exoneration. Article 1 exonerates bond holders, individuals and legal entities residing or domiciled in the Bolivarian Republic of Venezuela, from paying Income Tax on their income from the liquidation of capital and interest or yields of the investments made in bonds or similar securities issued and guaranteed by the Venezuelan Central Bank.    Determination of exonerated income. According to article 2, the determination of exonerated income will be made following the rules on “income, costs and deductions of taxable income” contained in the Income Tax Law.

Annual return of taxed and exonerated global net income. Under article 3, those interested in benefitting from the exoneration must file the annual return of taxed and exonerated global net income under the terms and conditions set forth in the Income Tax Law and its Regulations.   In addition, according to article 4, in order to enjoy the benefit, the beneficiaries must comply with this Decree, and with the Income Tax Law, its Regulations and other applicable rules.   Loss of the benefit. Those that do not comply with their obligations under Decree Nº 4685, the Income Tax Law, its Regulations, and other applicable rules and regulations, will lose the privilege to benefit from this exoneration.   Exoneration timeframe. Article 6 of Decree Nº 4685 indicates that the exoneration benefit will last for one (1) year from its entry into force.   Entry into force. According to Article 8, Decree Nº 4685 entered into force with its publication in Official Gazette Nº 42371 on May 6th, 2022.