Organic Law on Sports
The Organic Law on Sports, Physical Activity, and Physical Education (the “Law”) was published in Official Gazette N° 39.741 of August 23, 2011. The purpose of the Law is to establish the bases for physical education and to regulate the promotion, organization, and administration of sports and physical activity as public services.
The Law provides for the creation of the Fondo Nacional para el Desarrollo del Deporte, la Actividad Física y la Educación Física (National Fund for Development of Sports, Physical Activity, and Physical Education), which will be formed by the contributions of the companies or other public and private organizations that carry out economic activities in the country for profitable purposes; the donations and any other extraordinary contribution made by the Republic, the states, the municipalities, or any public or private entity, and the yield on such funds.
The Law establishes that companies or other organizations the annual net profit or accounting profit of which exceeds twenty thousand Tax Units (20,000 TU, currently equivalent to Bs. 1,520,000) must contribute one percent (1%) of said annual net profit or accounting profit in accordance with the parameters defined by the Regulations to the Law, which have not been promulgated yet. Fifty percent (50%) of the contribution may be used by the companies for execution of their own projects aimed at the development of physical activities and for sponsorship of sports, always provided that the guidelines of the National Institute of Sports (Instituto Nacional del Deporte) are met.
According to the Law, the contribution will not constitute an Income Tax rebate.
Article 80 of the Law penalizes the failure to perform the obligation to make the contribution with double the amount of the contribution owed and in case of repetition of the failure, the penalty will be triple the amount of such contribution.
Notwithstanding what is prescribed with a general character in the Organic Tax Code, Temporary Provision Eighth of the Law establishes that said contribution will be applicable as from the publication of the Law in the Official Gazette of the Bolivarian Republic of Venezuela and that during its first year of effectiveness, the taxpayers must make the relevant contribution in proportion to the number of months of effectiveness of the Law, taking into account, in each case, the commencement and the end of their respective fiscal years.
Download File : 2011-08-23-39741-Ley-del-deporte.pdf
“NOTE: THIS INFORMATION SHOULD NOT BE CONSTRUED AS LEGAL ADVICE ON ANY SPECIFIC MATTER AND ITS CONTENT ARE INTENDED AS A MANAGEMENT ALERT AS TO CURRENT DEVELOPMENTS IN VENEZUELA, ANY SPECIFIC LEGAL QUESTIONS REGARDING THE POSSIBLE APPLICATION OF NEW OR PROPOSED LEGISLATION TO PARTICULAR SITUATIONS SHOULD BE ADDRESSED TO TRAVIESO EVANS ARRIA RENGEL & PAZ.”