Tax Authority: Repsol, Vinccler, CGC Owe Back Taxes

Venezuela's tax authority Seniat has for the second year in a row notified three foreign oil companies it objects to the amount they pay in taxes to perform E&P, Seniat said in a press release.

The companies are: Repsol YPF Venezuela, the local unit of Spain's oil major Repsol YPF (NYSE: REP); Vinccler Oil and Gas, owned by Canada's Harvest Natural Resources (TSX:HNR); and the Venezuelan operation of Argentina's CGC.

Seniat notified Repsol it owes 17.2bn bolivares (US$8mn), Vinccler it owes 34.2bn bolivares and CGC 5.9bn bolivares. The taxes are for the 2005 fiscal year except Vinccler's, which cover fiscal years 2002-05.

Late in 2005, Seniat retroactively hiked the tax rate for oil projects from 2001 to 50% from 34%.

Seniat officials in Caracas declined to confirm whether these three companies represent an isolated group or if every foreign oil company in Venezuela will also be asked to pay more for FY2005.

Roughly 20 oil companies operating in Venezuela have paid Seniat more than 700bn bolivares in back taxes for 2001-04. The government expects to collect about US$3bn once all reparations are paid.

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