Venezuela: No JVs for those owing taxes

Foreign oil companies with pending tax debts will not be able to convert their operating contracts into joint venture deals with the government, Venezuela’s tax chief said Sept. 29.

Jose Vielma Mora, head of Venezuela’s Seniat tax agency, said the government could offer companies a three-year payment plan to help them pay tax debts. The finance and oil ministries would offer such plans to foreign firms with pending taxes on a case by case basis.

“Whatever company doesn’t pay taxes ... cannot sign the joint venture deals,” said Vielma Mora. “We don’t want companies to leave, we just want them to pay taxes.”

Oil companies running Venezuela’s 32 oil operating agreements must convert their deals into joint ventures with state oil company Petroleos de Venezuela S.A., or PDVSA, before the end of the year. PDVSA will have a majority share in all of the joint ventures with foreign firms.

The government of President Hugo Chavez has said foreign oil companies owe the country more than US$3 billion in unpaid taxes.

Venezuela is the world’s fifth largest oil exporter and a founding member of the Organization of Petroleum Exporting Countries.

Since taking office in 1999, Chavez has pushed to increase tax revenues in this oil-rich South American nation of 26 million.

—The Associated Press