Upon service by the tax authorities of a preliminary deficiency assessment report, determining the deficiency tax ("Assessment Report"), the taxpayer has 15 business days to pay the deficiency tax voluntarily, as well as reduced fines and late payment interest. If the taxpayer decides not to pay the deficiency tax, it will have 25 business days from the expiration of the referred 15 business days to file written arguments and evidence against the Assessment Report (the terms are longer in case of transfer pricing audits). The tax administration must issue the Final Deficiency Assessment Resolution ("Resolution") and serve it to the taxpayer within one year after the expiration of the 25-day term mentioned above. The tax administration may follow abbreviated procedures in certain cases, in which it directly issues and serves the Resolution. The taxpayer may either pay the amounts set forth or challenge the Resolution. The taxpayer, within 25 business days of being served the Resolution, may: (a) file an administrative tax appeal before the tax administration; (b) file an administrative tax appeal with a subsidiary judicial tax appeal before the tax administration; or (c) file a judicial tax appeal directly with the tax courts. If the taxpayer files an administrative appeal or an administrative appeal with the subsidiary judicial tax appeal, the tax administration will have 60 calendar days to decide.
- Administrative: One level of jurisdiction when the taxpayer files the administrative tax appeal with the Tax Administration.
- Judicial: Two levels of jurisdiction, Tax Trial Courts and the Supreme Court of Justice.
If the taxpayer files only an administrative appeal and the tax administration does not decide on it within the 60-day term, the taxpayer will have the option of either waiting for the decision indefinitely or considering that the tax administration tacitly denied its appeal and, therefore, filing a judicial tax appeal with the federal trial tax courts ("tax court"). The taxpayer must file such an appeal within 25 business days of the expiration of the 60-day term. If the taxpayer files an administrative appeal with the subsidiary tax appeal and the tax administration reaches no decision upon expiration of the 60-day term or decides dismissing the administrative tax appeal, the tax administration must then send the subsidiary tax appeal to the tax court.
Judicial procedure is:
- The taxpayer must always file the judicial tax appeal before the tax court with jurisdiction on the taxpayer's tax domicile. There are nine tax courts with jurisdiction in as many regions of Venezuela. The tax court receives the appeal, assigns a number and orders the service of the appeal to the tax administration, the General Comptroller's Office and the General Attorney's Office. This step may take several months.
- After the tax court completes the service of the appeal, it has five court days to decide whether to hear the appeal. This means that the court will examine the appeal to determine if the taxpayer filed it on time and if the appeal fulfills other formal requirements. If the tax court decides to hear the appeal, the tax administration will have 10 court days to appeal to the Supreme Court. Here, the Supreme Court will have 30 calendar days to rule on the hearing. If the Supreme Court confirms the tax court's decision, the procedure is terminated, the deficiency assessment becomes final and the taxpayer has to pay it. If the Supreme Court revokes the tax court's decision, it will remand the case to the tax court for continuing the procedure.
- After the tax court decides to hear the appeal or receives the decision of the Supreme Court regarding continuation, the parties will have 10 court days to provide evidence. Each party must file with the court a brief containing a list of the evidence they intend to use during the procedure. The parties will have three court days to challenge the evidence the other party intends to use. The court will then have three court days to decide if it will hear all the evidence the parties provided. The parties will have 20 court days to present the evidence before the court (e.g., calling witnesses and expert witnesses to the bench), but can obtain extensions in certain cases. With documents, it is very common to attach the documents to the brief that lists the evidence.
- After the 20-day evidence term or its extensions, the parties have 15 court days to file their conclusions and, following that, eight court days to file comments to the counterparty's conclusions. Tax courts have 60 calendar days to decide and may extend the term for 30 additional calendar days, although, normally, reaching the decision takes an average of several years.
- If the decision of the tax court is unfavorable, the taxpayer may appeal to the Political-Administrative Chamber of the Supreme Court that renders the final decision. If the decision of the tax court is favorable to the taxpayer, the tax administration may also appeal to the Supreme Court. If the tax administration files no appeal to that decision, the tax court must send the case file to the Political-Administrative Chamber of the Supreme Court that may confirm or revoke the decision.
- Within six months of the final decision by the Political-Administrative Chamber, the taxpayer and the tax administration may challenge it before the Constitutional Chamber of the Supreme Court by filing an extraordinary constitutional review appeal only on the grounds that the Political Administrative Chamber's decision directly violates the constitution.
Approximately, between seven to 12 years for a final decision by the Supreme Court of Justice.
- Start: See answer to question 2.
- Conduct of the proceedings: See answer to question 2.
- Completion of proceedings: See answer to question 2.
- Other actions: Because filing the administrative or judicial tax appeal does not automatically suspend the payment of the deficiency tax assessments, the taxpayer may request the tax administration or tax court, as applicable, to suspend the payment of the assessments if it can prove that such payment can cause serious damage to it and the appeal is based on prima facie evidence. The trend of the tax administration and tax courts, however, is not to grant the suspension of the payment of assessments unless the taxpayer provides a guarantee to cover the deficiency assessment and the litigation costs. Normally, the guarantee consists of a bond posted by a local bank or insurance company, but the tax administration and tax courts will accept other guarantees, such as a cash deposit, real estate mortgage or the pledge of movable property.