Harvest Completes Review of Venezuelan Income Tax Assessment

Harvest Natural Resources reports that Harvest Vinccler, C.A. (HVCA), its 80 percent owned Venezuelan subsidiary, has completed its review of the $85 million preliminary tax assessment previously received from the SENIAT, the Venezuelan income tax authority. Based on that review, HVCA paid additional taxes of 1.6 billion Venezuelan Bolivars, or $751,000 at the official exchange rate of 2,150 Bolivars per Dollar. The payment was made at the 34 percent tax rate applicable to operating service agreements. The SENIAT may assess interest and a 10 percent penalty on the additional tax payment. The Company will recognize the additional tax and interest in its third quarter financial results.

With the payment of these additional taxes, HVCA believes it has met all of its tax obligations under the current Venezuelan tax code and tax law, and it will challenge the remaining $84.2 million in assessments and all penalties. HVCA has 25 working days to present its arguments to the SENIAT. The SENIAT could assess additional penalties on the remaining assessed, but unpaid amounts.