Seniat Considers Giving Oil Companies a Break

Venezuela's tax authority, Seniat, is considering reducing tax claims for some of the 22 oil companies it has served with claims totaling US$360mn with the aim of getting at least some of the money, a Seniat official told BNamericas.

At the heart of Seniat's claims is the government's unilateral decision last year to apply a retroactive 50% tax rate on exploration and production projects for the period 2001-2004 which had used a 34% rate for decades without any government objection.

"Some companies reject the 50% tax rate, so perhaps they could get some sort of reduction [in the amount of claims]," the official said.

As an example, France's Total (NYSE: TOT) "paid 29mn bolivares (US$13,000) on a 186bn-bolivar claim and now they say they can't pay anymore because of the 50% rate, to which they object," the official said.

Seniat told BNamericas in January it has so far received payments totaling US$54.4mn, a little more than 10% of the total alleged unpaid amount.

So far only five companies have paid everything the tax authority has demanded: Brazil's federal energy company Petrobras (NYSE: PBR), US firm West Falcon Samson, Anglo-Dutch major Shell (NYSE: RDS-B) and Venezuela's Inemaka. Italy's Eni (NYSE: E) and China's CNPC have not paid anything, according to the same report.

About Business News Americas: Business News Americas is a multilingual news and business information service that covers the most important original stories in 11 different business sectors throughout Latin America everyday. Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports. Click here for a Free two week trial to our Latin America Oil & Gas information service.

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