Income from stock issued by Venezuelan entities is deemed Venezuelan source income. For Venezuelan tax treaty purposes income from stock is usually covered by the “dividends” or “capital gains” articles.

Securities income may give rise to treatment as dividend or interest depending on the circumstances. The treaty qualification will vary as “dividends”, “capital gains” or “interest” accordingly.

Income from leasing and rental are treated as regular business income. They will be subject to taxation in Venezuela to the extent the assets are located in Venezuela. The treaty qualification will vary depending on the tax treaty in question. An important number of Venezuelan tax treaties include a broad definition of royalty that covers payment for the use or right to use industrial, commercial or scientific equipment which may lead to the possibility for Venezuela to tax the lease or rental income under the “royalties” provision. In other treaties with a more recent and restrictive definition of the term royalties these payments would qualify as “business profits”.

The treatment of income from licensing will vary depending on the characteristics of the contract and the form of payment. From a domestic law perspective, the income may receive various qualifications (ordinary income, royalty, or technological service, the latter two are subject to special presumptive taxation rules). From a tax treaty perspective the license will be covered by either the “royalties” or “business profits” provision depending on the circumstances.

Fees or other compensation paid for technical services rendered from abroad are deemed to be Venezuelan source income and are subject to special presumptive taxation rules. Some Venezuelan tax treaties include specific language (either by including technical assistance in the royalty provision or in a special provision) allowing the application of withholding at source to technical assistance fees.

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