Focus on Venezuela's VAT withholding regime

Like many other Latin-American countries, in an attempt to curtail VAT evasion, which is estimated at 50%-60%, Venezuela recently introduced a VAT withholding mechanism. Under that mechanism large enterprises and public entities are made responsible for the proper compliance with the VAT rules by small businesses. Description of the features of the withholding regime and its financial burden for businesses. Despite its difficult introduction and the risk that it may be declared unconstitutional, the mechanism came into operation on 1 January 2003.