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María Gabriela Sosa (Caracas)
Tel: (58-2) 276-5111
Fax: (58-2) 264-1532
Official Gazette No. 35,945 of 24 April 1996, published the Tax Remittance Law, which establishes a temporary partial pardon of domestic taxes and the total pardon of fines and late interest arising from said taxes. Taxpayers that wish to make use of this benefit may do so until 24 October 1996, the expiration date of this law.
The remittance system set forth in the Tax Remittance Law (the "Law"), has the following characteristics:
1. It solely refers to tax debts to the National Treasury, that is, to the Integrated National Service of Tax Administration, or SENIAT. Therefore, debts arising from municipal taxes are excluded.
2. Only tax debts arising from taxable events occurring prior to 31 December 1994 may be condoned. This means, that for taxes determined periodically, such as Income Taxes and Business Assets Taxes to be condonable, they must relate to years ending 31 December 1994, or before that date in the case of periods other than calendar years or shorter than one year. Taxpayers, prior to making use of this benefit, must verify that their tax debts are payable, that is, that they are debts for open tax years.
3. The pardon of the debts and their accessories includes the acquittal of corporal penalties in cases of tax offenses.
4. Expressly excluded from the system are the debts arising from the Valued Added Tax ("VAT"), the Luxury and Wholesales Tax ("LWT") and the Tax on Financial Debits that was in force during 1994. Therefore, this system applies to Income Taxes, Business Assets Taxes, the Tax on Donations, Inheritance and other Related Areas, the Cigarette and Tobacco Products Tax, the Tax on Alcohol and Alcohol Products, and the duties set forth in the (i) Organic Customs Law; (ii) Organic Law Reserving to the State the Industry and Trade in Hydrocarbons; (iii) Mining Law; (iv) Organic Law of Salt Works Income; (v) Telecommunications Law; (vi) Public Registry Law; (vii) Judicial Tariff Law; and (viii) Revenue Stamp Law.
5. Excluded from the system are tax withholdings not paid to the Treasury by withholding agents.
6. This remittance benefit may be used by taxpayers who (i) have failed to file returns, (ii) have omitted revenues on their returns, (iii) have not paid outstanding and payable amounts, (iv) are in the administrative summary phase, that, is have been subject to assessment and the summary final resolution has not been issued; (v) have filed an administrative appeal, or (vi) have filed a tax appeal.
On 13 May the instructions issued by SENIAT for the interpretation and application of the Law were published in Official Gazette No. 35,957, describing the procedures that must be followed to make use of the benefits in the case of taxpayers that have failed to file returns, or omitted revenues in their returns, or those in administrative summary phase and those filing administrative appeals or tax appeals.
As now written, the instructions do not clarify the contents of the Sole Paragraph of Article 8 of the Law, which has spurred a great deal of confusion. According to this paragraph, the Treasury must effect an assessment after the concession of the benefit when the taxpayer declares amounts of less than 20 percent of the amounts declared in the year corresponding to 1995. The basis of the confusion arises from the fact that this paragraph is found in Article 8 of the Law, which is the Article establishing the partial tax remittance percentages for those taxpayers that (i) have liquid and payable payments, or (ii) have been subject to assessment and are in the administrative or litigation phase. Since these taxpayers have nothing to declare, for the Treasury has already determined the tax, this rule only makes sense for those taxpayers referred to in Article 3 and 5 of the Law, that is, those failing to file returns or omitting revenues on their returns. Furthermore, the rule contained in this paragraph seems to apply solely to the amounts declared for Income Tax and Business Assets Tax purposes. It is hoped that the next instructions to be published by SENIAT will clarify this and other blurred issues.
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