Transfer Pricing
Country Summary

This document provides information about transfer pricing regulations in Venezuela. While Venezuela is not a member of the OECD and hasn’t adopted BEPS (Base Erosion and Profit Shifting), its legislation allows for the application of the 1995 OECD Guidelines or their later versions. The document covers laws and regulations, the definition of related parties, nature of transfer pricing documentation, and audit practices. It also delves into the specifics of transfer pricing documentation, including the level of documentation, industry and company analysis, functional analysis, the choice of transfer pricing method, and penalties for non-compliance.


Venezuela’s transfer pricing regulations are not directly aligned with the OECD, but they allow for the application of the 1995 OECD Guidelines or later versions. BEPS (Base Erosion and Profit Shifting) has not been adopted in Venezuela.

Laws & Regulations

The official arrangement No. SNAT/2010/0090 issued by SENIAT outlines the policy for calculating and using the arm’s-length range for transfer pricing purposes. It introduces the concept of the “interquartile range” and provides guidelines for determining arm’s-length prices. Thin capitalization rules were introduced in 2007, affecting Venezuelan taxpayers and permanent establishments holding related party debt.

Definition of Related Party

Entities are considered related if they participate in the management, control, or capital of each other directly or indirectly. Transactions with entities in low-tax jurisdictions are also subject to transfer pricing regulations. Additionally, independent intermediaries can be treated as related parties when they handle transactions for Venezuelan and foreign companies.

Nature of Transfer Pricing Documentation

Venezuela relies on domestic transfer pricing rules and requires annual preparation of transfer pricing documentation. It doesn’t align with OECD or BEPS guidelines.

Advance Pricing Agreement (APA)

Unilateral and bilateral APAs are available under Venezuelan tax regulations. Procedures for obtaining APAs and reporting requirements are outlined in the Income Tax Act. Bilateral APAs are possible with countries with which Venezuela has signed tax treaties.

Audit Practice

Transfer pricing rules were introduced in 1999, and a Transfer Pricing and Advance Agreements Unit was established in 2002. Transfer pricing audits have been conducted across various industries, and taxpayers are encouraged to maintain contemporaneous documentation to avoid discrepancies.

Transfer Pricing Documentation

a) Level of Documentation: Extensive documentation is required, including details on fixed assets, organizational structure, foreign-related parties, transaction specifics, financial statements, and more.

b) Industry Analysis: An understanding of industry-specific value drivers is essential.

c) Company Analysis: Details about the company’s management structure, business strategies, and involvement in business restructurings or intangible transfers are necessary.

d) Functional Analysis: Assessment of significant activities, tangible and intangible assets, and risks related to intercompany transactions.

e) Choice of Transfer Pricing Method: Venezuela follows OECD Transfer Pricing Guidelines and prioritizes the Comparable Uncontrolled Price (CUP) method.

f) Economic Analysis – Benchmark Study: Both single-year and multi-year analyses are preferred, and a weighted average for arm’s-length analysis is commonly used.

g) Inter-company (IC) Legal Agreement: Legal agreements are not a top priority, and the “conduct of parties” concept is emphasized.

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