Venezuela announces National Tax Harmonization Agreement

By E.C.V. & ASOCIADOS

The Government of Venezuela announced on August 9, 2020, the execution of the National Agreement of Municipal Tax Harmonization, which will harmonize municipal taxes in 305 municipalities throughout the country. Venezuela is comprised of 335 municipalities, incorporated into 23 states and the capital district.

The agreement prohibits the collection of taxes in foreign currency, even though it approves the use of the Venezuelan crypto-asset Petro as a unit of account for the dynamic calculation of municipal taxes and sanctions.

It looks to ensure that the harmonization of all taxes is maintained to avoid double taxation.To achieve this a single registry of municipal taxpayers will be created and administered by the Bolivarian Council of Mayors. It will function as a digital tool for the consultation, information exchange, and monitoring of companies with branches in different municipalities to verify declaration made in one mayor’s office but paid in another. In the future, it can also be used to cross-check information with the national tax system.