The Venezuelan National Institute of Socialist Training and Education established the obligation of taxpayers to comply with formal duties related to the registry, withholdings, payment, and solvency of the INCES payroll special contributions
Private and public sector employers are subject to the payment and withholding of the special contribution to the National Institute of Socialist Training and Education (the Institute). Private sector employers and stock companies in which the State owns more than 50% of the shares that employ five or more workers, must pay the Institute, within five business days following the closing of every quarter, a special contribution equivalent to 2% of their employees' monthly normal salary. Private sector employers, stock companies in which the State owns more than 50% of the shares that employ five or more workers and public sector employers1 must withhold, on behalf of its employees, a special contribution equivalent to 0.5% of the year-end profit sharing or bonuses paid to the employees. Employers must pay the amounts withheld to the Institute within 10 days of payment.
The institute issued Order No. OA-2016-07-240,2 in which it established the obligation to comply with formal duties regarding the registry, contributions, withholdings, payments and solvency certificate of the contributions to the Institute. Subsequently, the Institute issued Order No. OA-2016-12-545 (the Order)3 which corrected a material error of Order No. OA-2016-07-240. The Order entered into force on 16 December 2016.
The formal duties established in the Order are:
1. Taxpayer's registry
Employers must register in the Institute's National Registry of Special Contributions, within 45 business days after the date of constitution. The Registry must have the information related to the entity's tax precedents and economic activity. Employers that were created or incorporated before the entry into force of the 2014 INCES Law (eg, on 19 December 2014)4 must register in the Institute's National Registry of Special Contributions during the 45 business days following the publication of the Order in Official Gazette. The registry and update5 process can be completed online6 or written. The Institute's online system will issue the electronic certificate once the information is received as proof of compliance.
The Institute will maintain in its tax system the employers subject of the special contribution for the purpose of reviewing the taxpayer's compliance. Employers must place the Institute's National Registry of Special Contributions voucher in a visible place of its tax domicile.
Employers must, as a control mechanism, fill a report of the contributions made and send such report to the Institute in a digital format within the 10 business days following the closing of every quarter. The report must contain the following information:
- The employer taxpayer number issued by the Institute, name, fiscal domicile and the employer's Sole Fiscal Registry Information number;
- Information of the quarter and year to which the contribution corresponds;
- Date of the payment of the contribution;
- Identification of the payment method and financial institution;
- Tiuna List of the Venezuelan Social Security Institute;
- Amount of the normal salaries of each employee discriminating month to month according to the quarter to report;
- Total amount of the normal salary of the quarter to report;
- Total calculation of the 2% contribution;
- Roster and documents of the payment method.
Employers must maintain, also as control method for the withholdings made, a report of the withheld and paid amounts, the employer must send the report to the Institute in digital form within the five business days following the payment of the contribution. The report must contain the following information:
- Withholding date;
- The employer taxpayer number issued by the Institute;
- Description of the contribution;
- Identification of each employee and position held;
- Identification number of each employee;
- Number of employees, total profit sharing amount received in one year, or year-end bonuses;
- Total amount of the 0.5% contributions;
- Applicable fiscal year;
- Observations; and,
- Roaster and documents of the payment method.
4. Payment methods for the Contributions and forms of payment of the withholdings to the Institute
Employers must pay the contributions and the withholdings through any of the following methods: (i) cash deposit or cashier's check, (ii) bank transfer, (iii) on-line payment, or (iv) electronic payment (through a point of sales machine). The Institute will establish an on-line payment and quarterly report system for updating the data subject to control through verification and inspection processes every quarter.
5. Verification powers of the Institute
The Institute will be able to verify the information provided by the employers regarding the update of the Institute's National Registry of Special Contributions, the payment terms, formalities of the reports or returns, lack of records, extemporaneous records, and any other obligation or measure of tax control. Employers must collaborate with the officials during the verification process.
6. Solvency Certificate
The Institute Official will certify the taxpayer's compliance of the obligation through a solvency certificate that will be valid during three months. Employers must maintain the solvency certificate in a visible place in their fiscal domicile and should not interfere with any verification activity of the Institute.
7. Registry Updating
To update the registry, employers must notify the Institute, within the month following any of these events:
- Change of the employer's name;
- Change of the employer's fiscal domicile;
- Change of the employer's principal activity and cessation, suspension or stoppage of the economic activity; and,
- Merger of the employer in a period of three months as of the publication in the Commercial Registry in accordance with article 345 of the Commercial Code.
8. Sanctions for noncompliance
Non-compliance of the Order will be sanctioned according to the Organic Tax Code.
1Public sector employers are government agencies and entities that provide services which include the following: Ministries; Autonomous or Public Institutes; State-owned Companies; Government Offices, Financial Institutions of the Public Sector; Government Advisory and Support Bodies; Foundations, Associations and Civil Partnerships of the State; Autonomous or De-concentrated Services; National Universities; organs and entities of the Legislative, Judicial, Citizen and Electoral Powers; and all public law national, state, metropolitan and municipal, public or mixed entities, whether public or mixed.
2Official Gazette No. 41,046 of December 6, 2016.
3Official Gazette No. 41,054 of December 16, 2016.
4Official Gazette No. 6155 Ext. of November 19, 2014.
5Refer below to sub-paragraph 7.