Global Tax Alert Master (News from Americas Tax Center) | 24 March 2014

Venezuela amends Master Law for Fair Prices

  • Share

The Venezuelan Government amended the Master Law of Fair Prices (Law) (Decree No.600 published in the Official Gazette No.40.340, of 24 January 2014) to increase pricing control faculties.


The purpose of the Law is to ensure the sound, fair, equitable, profitable, and sovereign development of the national economy through the determination of fair prices for goods and services. Under the Law, cost structures are analyzed, maximum profitability percentages are set, and economic and business activities are effectively audited to protect the income of the citizens, particularly, the salaries and wages of workers and employees and people's access to goods and services. The Law also defines all of the administrative violations, procedures and penalties, business offenses and related punishments, as well as indemnities for damages inflicted.

Local or foreign individuals or companies conducting business activities in the territory of the Bolivarian Republic of Venezuela are subject to this Law. The Law also applies to business activities performed by electronic means. Those who by the very nature of their activities are governed by other special rules are exempted from application of this Law.

Creation of SUNDDE

The National Superintendence for the Defense of Socio-Economic Rights (SUNDDE, for its acronym in Spanish) was created to monitor foreign currency allocated to the aforementioned individuals and public or private corporations to ensure the fulfillment of the objective for which the foreign currency was granted. Individuals and public or private corporations subject to this Law that receive foreign currency will be required to furnish a performance bond.

For purposes of State intervention in private local establishments, the declaration of public utility and social interest prevails for all goods and services required for the activities related to production, manufacture, import, storage, transport, distribution and marketing of goods and services rendered.

SUNDDE will keep a Single Register of Individuals and Companies Conducting Business Activities (RUPDAE), which will be publicly accessible to anyone requesting information. Upon startup of RUPDAE operations, individuals and corporations subject to this Law will be given 180 days to formalize their registration. As of the day of issuance of this Tax Alert, this registration had not begun.

A maximum profit margin will be set annually by SUNDDE and under no circumstances will the profit margin of each marketing chain be 30 percentile points above the cost structure of the good or service.

The Law of Fair Costs and Prices, and the Law for the Defense of People's Access to Goods and Services, are repealed by the Law. However, all proceedings initiated during the functioning of the Superintendence of Fair Costs and Prices and the Institution for the Defense of People's Access to Goods and Services remain valid.

Additionally, all fair prices determined by the President of Venezuela will remain valid until SUNDDE determines its price.

General accounting criteria for the determination of fair prices

On 7 February 2014, SUNDDE published an Administrative Order that set out the general accounting criteria for the determination of fair prices, which among others are:

  • Administrative, representation, advertising and selling expenses shall not exceed 12.5% of the production cost of the good or the provision of service.
  • Production costs only include the necessary values in regular efficiency conditions.
  • Taxes, donations, not-for-sale samples, and other expenses, under the SUNDDE criterion, will not be considered as part of the costs.

For additional information with respect to this Alert, please contact the following:

Ernst & Young (Venezuela), Mendoza, Delgado, Labrador & Asociados, Business Tax Advisory, Caracas
  • Saul Medina
    +58 212 905 6716
  • Juan Osorio
    +58 212 905 6626

EYG no. CM4290