Government of Venezuela Studies Tax Reform to Regulate Transactions With Cryptocurrencies

The international media Bloomberg has indicated that the National Constituent Assembly of Venezuela would be studying a tax reform to regulate operations in foreign currencies and cryptocurrencies within the country. The information was confirmed by a constituent deputy who makes up the economy committee of that body.

The idea would be to present a regulation to establish a value-added tax (known internally as VAT) to commercial operations carried out with these types of payments. The deputy commented that with this bill the government seeks to “adjust to the new times” that the national economy demands.

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According to two other legislators told the Bloomberg researchers, the government would be considering setting taxes for all operations carried out with cryptocurrencies, dollars, euros and any other international currency that circulates in the national economy. The only currency that will not be subject to these regulations will be the state virtual currency, the Petro.

This value-added tax that is intended to be imposed on cryptocurrency transactions will be added to the Value Added Tax that is already applied within the national tax framework (the tax that is assessed at 16% on the amount to be paid). Lawmakers interviewed by Bloomberg did not reveal what percentage could be applicable and only limited themselves to answering that the president had the power to set the rate according to the indicators he considers relevant.

Another aspect highlighted by the legislators is that the reform they are working with will establish the obligation so that merchants who settle with cryptocurrencies within their establishments must issue invoices where the amount in cryptocurrencies of the operation is reflected, its equivalent in bolivars, the legal tender within the South American country and its respective exchange rate applicable to the operation.

A new impulse for Petro?

Although the legislators did not issue any comments on whether this measure was focused on giving Petro a preference over the rest of the currencies circulating in the Venezuelan market, it can be seen that the “surcharge” raised through the tax could generate a greater “attractive” for payments with the currency issued by the Venezuelan State to the detriment of payments with a cryptocurrency.

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Beyond this new approach in the tax field, the idea of ​​regulating cryptocurrency operations in the country is not new. Already at the beginning of last year, a regulation was published where it was established that operations with cryptocurrencies should be notified to the tax authority and paid in the cryptocurrency itself with which the operation was made. However, until now no technical details have been provided on how the application of this measure will be.

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