Sat. Feb 29th, 2020

Venezuela will charge a tax of up to 25% on foreign currency transactions



Venezuela will charge an additional tax of up to 25% on transactions that are completed in foreign currency in the middle of the de facto dollarization that the country is living, according to a decree of the official National Constituent Assembly (ANC) that was made official on Tuesday.

The Government of Venezuela may set additional fees to “goods and services rendered in foreign currency, cryptocurrency or cryptocurrency other than those issued and backed” by the Venezuelan State, reads the text approved by the ANC, a body that is not recognized For numerous countries.

The Value Added Tax (VAT) is currently set at 16% and in accordance with the legal reform the Executive may issue an additional tax rate of a “minimum of 5% and a maximum of 25%” when the monetary unit used in The operations are not the bolivar.

The reform also exempts transactions made in petro, the cryptocurrency that the Nicolás Maduro Administration launched two years ago and that has been sanctioned by the United States authorities.

DOLARIZATION OF FACT

Chavismo began in 2018 the dismantling of the exchange control that the late president Hugo Chávez set in 2003 and granted the exclusivity in the handling of foreign exchange to the State.

In 2019 there was a de facto transactional dollarization process, with the consent of the authorities and in the midst of the severe economic crisis that has millions of Venezuelans in misery and has made many others flee to other countries.

Thus, in the Caribbean country, the dollar is practically the only currency seen in the streets and although some shops still show their prices in bolivars they adjust them frequently as the national currency is devalued.

It is estimated that two thirds of the operations carried out in Venezuela are made in currencies, mainly the US dollar.

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