In Venezuela, the economic conditions are very changeable, therefore there is the ISRL so that each citizen contributes with the payments to the economy through the ARC form.
What is the ISLR?
The Income Tax (ISLR) is paid to the Venezuelan state through the Seniat, it must pay the profits that the worker acquired during the fiscal year. It is a mandatory monetary contribution for both natural and legal persons. This is calculated depending on the income during the fiscal year.
You have the opportunity to make the declaration until March 31 of each year, the declaration must be presented within three months after the end of the taxpayer’s recordable year.
The legality of the ISLR was established in 1943, in the first article of the Law of income tax which remains unchanged:
“The annual, net and available enrichments obtained in money or in kind, will cause taxes according to the norms established in this Law. Except as otherwise provided in this Law, any natural or legal person, resident or domiciled in the Bolivarian Republic of Venezuela, will pay taxes on their income of any origin, whether the cause or source of income is located within the country or outside it.
Who declares the ISLS and what amount of money must I have earned to declare?
- If you are a natural person with a net annual income greater than 1,000 tax units or gross annual income greater than 1,500 tax units, you must pay taxes.
- If you are a legal person, it is mandatory that you declare your losses or enrichments at the end of the fiscal year, regardless of the amount.
Advantages of the ISRL
- Productivity: Because it produces a high performance at the fiscal level.
- Increasing your rate can increase your income. Because it is a Tax, it can gradually increase its percentage, ensuring a considerable income without the need to create another tax.
- Adaptation to the objectives of social justice: personal deductions, progressivity, discrimination of the source of income.
What is the ARC form?
The ARC form is the document that shows the amounts of annual income received by teachers, workers and administrative personnel of the MPPE, you can also see the taxes withheld from the payroll during the fiscal year.
What is it for?
Thanks to this form, the workers of the Ministry of Popular Power for Education have the opportunity to detail the amount that has been withheld for the payment of Income Tax (ISLR) in addition to the amounts of all the money they have received for their salary during the year.
Contracted, retired or permanent workers of the Ministry of Popular Power for Education in Venezuela must ask their respective ministry for the Tax Withholding Agent (ARC) form to carry out the declaration.
In the same way, workers in the health sector, and those who are part of Fundasalud, must request the ARC form from their employer to carry out the ISLR declaration.
How to consult the form in the system?
Currently, technology influences all aspects of life, an example of this is that the workers of the Ministry of Popular Power for Health and Fundasalud have at their disposal to print the ARC form through their computer following the steps that we will mention:
- STEP 1: Go to the MPPE page and download the form http://comprobante_arcv.me.gob.ve/
- STEP: Enter the ID digits where indicated and press «Trigger”.
- STEP 3: Finally, you will see a receipt on the screen where you can check all the details of the process, withholdings, remunerations and others.
- STEP 1: Enter the corresponding Web page depending on the state where you are and click on the option “Download ARC form”
- STEP 2: Complete all the information requested in the form, such as ID, password and type of payroll. In the event that you are not registered, click on “Sign up here” and follow the steps.
You will get the personalized ARC form in PDF format just like in the Ministry of Popular Power for Education.
Income tax withholdings
They are the amounts of money that enter the state as a result of the income tax of the taxpayer informed by a debtor or payer of net enrichment or gross income by virtue of carrying out some of the regulatory activities in the country.
There are various types of withholding that apply depending on your case.
- Withholdings made for lottery prizes or fortuitous winnings.
- Withholdings on wages and salaries.
- Withholdings on dividends and shares
- Withholdings for accidental winnings other than lottery prizes.
What determines the withholding percentage that each worker must pay?
The percentage is determined by the benefit of wages, salaries and remunerations, this means that it will depend on the worker himself, but if the worker does not comply with this duty, it will be up to the withholding agent to determine the percentage.
What are withholding agents?
The Article 27 of the Organic Tax Code defines it as:
Those persons designated by law or by the tax administration with prior legal authorization who, due to their public activities or by reason of their private activities, intervene in acts or operations of which they must withhold the corresponding tax.
Therefore, an income tax withholding agent is that debtor or payer who, by virtue of a legal or regulatory provision, is obliged to withhold amounts on account of taxes and pay them in an authorized bank.
After the withholding agent has determined the percentage of withholding that the worker can make?
The withholding percentages estimated by the withholding agents will cease to be applied when the beneficiaries of the remunerations calculate it for themselves and provide them to their debtor or payer.
Types of enrichment on which the withholding of ISRL does not apply
- Payments in kind.
- Income tax enrichment.
- Enrichments that will not be taken into account while the benefit lasts.
Services such as water, electricity, gas, landlines or cell phones and toilets are free of withholdings.
What are the rules governing income tax withholdings?
Articles 73 and 86 of the income tax law provide that debtors of net wealth or gross income are obliged to withhold the tax at the time of payment or account credit as well as to pay such amounts to an office receiving national funds within the terms and conditions established by regulation in the administrative decisions issued by the SENIAT.
This partial regulation of the income tax regarding withholdings exposes all the cases where withholdings must be made as well as the applicable withholding percentages.
When should the withholding be made?
According to what is established in Article 82 of the Income Tax Law, the payment into the account is made up of all those amounts that the debtors of the income credit in their accounting records through nominative entries at the rate of their creditors because they are legally enforceable credits in the seat date.
Why do I have to declare before the SENIAT?
The Income Tax (ISLR) declared to SENIAT constitutes one of the instruments for obtaining the greatest non-oil income by the Venezuelan State, which is why it has been the subject of numerous reforms, some necessary and others not, aimed at achieving the rationality that every tax system must achieve.
The tax laws of the country can incur in events that occurred totally or partially abroad. In the event that the taxpayer has Venezuelan nationality, has residence or domicile in Venezuela or is permanently in the country, the law will ensure that the consequences of international double taxation are avoided.
The Income Tax Law (ISLR) has undergone several significant corrections in order to adapt it not only to the national economy, but also to the need to stimulate national and foreign investment, through a secure legal platform, thus obtaining the state a fundamental tool for the economic reactivation of the Country.
Related articles that may interest you