Tax Authority Gives Total Until March 14 to Pay US$107mn

Venezuela's tax authority Seniat announced on Wednesday that French oil major Total (NYSE: TOT) has until March 14 to pay alleged back taxes totaling 231bn bolivares (US$107mn), state news agency ABN reported.

This is the amount Total owes for a retroactive tax increase between 2001 and 2004, Seniat head Jose Vielma was quoted as saying. According to the tax code, Seniat can impose a penalty of more than double the original unpaid amount, which with interest would total 577bn bolivares.

A Seniat official told BNamericas that Total's stance as "obstinate" and said Venezuela's government is "giving them a break they should take" by allowing the company until March 14 to square accounts.

"They insist they don't owe anything, refuse to recognize the claim. We disagree," the spokesperson said.

At the heart of the multimillion-dollar disagreement is a 2005 Seniat decision that said oilfield operators should pay 50% taxes instead of 34%.

Total officials in Caracas declined comment. The French company is involved in several high-profile E&P ventures in Venezuela, including a 47% stake in Sincor, a project to produce some 180,000 barrels a day of synthetic crude from the Orinoco oil belt.

Total has also a preliminary agreement to enter as a minority partner in a joint venture with state oil firm PDVSA to produce crude in eastern Venezuela. The French company is active offshore as well, exploring for natural gas in the Plataforma Deltana with Norwegian oil major Statoil (NYSE: STO).

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