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Tax authority to fine Shell, Harvest and Eni this week – Venezuela

Business News Americas: Tax authority to fine Shell, Harvest and Eni this week – Venezuela

Posted 1 June 2005

 

(BNamericas.com) – Venezuela’s tax office Seniat will notify Anglo-Dutch company Shell, US company Harvest Vinccler and Italy’s Eni this week of fines corresponding to unpaid taxes from their operating agreements with state oil firm PDVSA, newspaper El Universal reported.

 

These are the first three companies to be fined by Seniat as part of its ongoing investigation into alleged tax evasion by 22 companies involved in 32 operating agreements with PDVSA, the paper reported.

 

Seniat alleges that the 22 companies owe up to US$2bn in unpaid taxes since 2000.

 

If companies make voluntary adjustments to their accounting procedures, then the fine will be 1% of the amount owed plus interest. However, if they wait to be audited by Seniat, the fine could be 10-125% of the amount owed, the paper reported.

 

This means that Shell, Harvest Vinccler and Eni will likely face fines of 10% in addition to the amount owed, the paper quoted Seniat special contributions manager Jose Cedillo as saying.

 

About 18 companies have shown their intention to change their accounting norms voluntarily and six that they will wait to be audited, according to Seniat.

 

Seniat officials have met with company representatives to discuss the tax payments and “they have shown us their desire to rectify and review their [financial] reports,” Cedillo said.

 

Seniat says companies must pay 50% tax on hydrocarbons production in every fiscal period in line with national tax law.

 

Venezuela’s tax code gives companies up to 36 months to pay fines imposed by Seniat, Cedillo added.

 

The tax investigation is part of PDVSA and the energy and oil ministry’s decision to migrate the 32 existing operating agreements to new joint ventures, in which PDVSA will hold a minimum 51% stake.

 

PDVSA president and energy and oil minister Rafael Ramirez has said the terms of the operating agreements signed under previous administrations are too generous to private companies and result in losses to PDVSA. – (BNamericas.com)

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