On February 24, 2017, the Venezuelan Tax Administration published Ruling N° SNAT/2017/0003 in the Official Gazette (hereinafter "the Ruling"), increasing the value of the Tax Unit (hereinafter "UT") from 177.00 Venezuelan bolivars (VEF 177.00) to VEF 300.00. A "tax unit" is an amount that links benefit increases and fines to tax rates, instead of fixing them in local currencies and subjecting them to inflation indexes. The increase became effective on February 24, 2017. The following describes some of the consequences of this increase for the labor market.
Increase of the "Meal Benefit"
In accordance with the Meal Benefit for Workers Law, employers must grant employees a payment for the "meal benefit," which is equivalent to 12 UT per day times 30 days per month, or 360 UT per month. The Ruling increases the amount of the meal benefit to a daily amount of VEF 3,600.00, or a monthly total of VEF 108,000.00.
Changes to Taxable Events
In accordance with the Organic Law of Science, Technology and Innovation, companies that have gross earnings higher than 100,000.00 UT are obliged to finance the science, technology, and innovation fund through the payment of a tax contribution. The Ruling amends this requirement so that companies should contribute to the fund at the end of the year only if their earnings are higher than VEF 30,000,000.00 for 2017. The amount of the tax contribution depends on the type of economic activity the company performs:
2% of the gross earnings for casinos and companies related to alcohol and tobacco; 1% of the gross earnings for private companies and 0.5% for public companies related to oil and gas and mining; and 0.5% of the gross...