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Venezuela Hits Oil Firm With Back-Tax Bill, Fine

THE WALL STREET JOURNAL: Venezuela Hits Oil Firm With Back-Tax Bill, Fine

“Last week, Royal Dutch Shell was the first foreign oil company to receive a tax bill and fine from the Seniat.”

Monday July 25, 2005; Page A13

DOW JONES NEWSWIRES

July 25, 2005; Page A13

CARACAS, Venezuela — Venezuela’s tax authority presented Harvest Natural Resources Inc. with an $85 million retroactive income-tax bill along with a fine — the second levied on a foreign oil company this month.

In a statement Friday, the tax authority, the Seniat, said the bill was for unpaid income taxes from 2001 to 2004. If Harvest pays the taxes within 15 days, it will be fined an additional 10% above the 180 billion bolivars it owes. Otherwise, the U.S. company could face fines of as much as 250% of the amount, the Seniat said.

Last week, Royal Dutch Shell was the first foreign oil company to receive a tax bill and fine from the Seniat.

The tax agency claims the contracts for 32 fields operated by international companies violate national tax laws because they give the companies a preferential income-tax rate.

Shell says it has paid taxes according to the law, and is seeking talks with Seniat officials on its retroactive bill.

The Seniat says it is auditing nearly two dozen foreign and domestic oil companies with operating contracts in Venezuela. Around 40% of Venezuela’s total oil production comes from private companies.

Write to Dow Jones Newswires editors at [email protected]

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