Venezuela Cuts Shell Tax Bill by 90% to $13M

CARACAS, Jan 23, 2006 (Dow Jones Commodities News via Comtex) By Peter Millard Of DOW JONES NEWSWIRES

Venezuela has reduced a retroactive tax bill for Royal Dutch Shell PLC (RDSA.LN) by 90% to $13 million after conducting a full review of the claims, said the Seniat tax authority on Friday.

"There was a deduction," said a spokeswoman at the Seniat.

The tax office gave Shell a bill for $130 million of allegedly unpaid taxes from 2001 to 2004 in mid-2005.

"They presented documents, and we reached a definitive amount," added the spokeswoman.

Venezuela is charging 22 foreign and domestic oil firms with fines for misreading the nation's tax laws. The Seniat says the contracts these firms signed under a previous government in the 1990s violated the nation's tax code by granting a preferential income tax rate, and it is now charging the difference back to 2001.

Shell wasn't immediately available for comment.

Venezuela, sitting on the largest conventional oil reserves outside the Middle East, has taken a tough line with oil firms. Venezuela has hiked tax rates on other private oil operations in the Orinoco river basin, lifting the state's revenue from existing oil operations.

Copyright (c) 2006 Dow Jones & Company, Inc.