Shell Hit By US$130m Venezuelan Tax Claim Amid Crackdown On Foreign Firms

by Mike Godfrey, Tax-News.com, Washington

16 August 2005

Venezuelan tax authorities have asked a court for an injunction over Royal Dutch Shell PLC assets worth US$130 million, and closed a company office in the country for 48 hours amid a tax dispute with the oil firm.

The injunction is the result of a US$130 million tax bill covering the years 2001-2004 given to Shell by the government in July, which the company has decided to contest. In response, the tax authority (Seniat) said in a statement that it had put a hold on "goods and rights for an amount over 280 billion bolivars" (US$130 million). The injunction also shut the firm's office in Lake Maracaibo.

Under the injunction, Shell will be prevented from exporting or selling the goods earmarked as collateral in the tax dispute, Seniat stated.

The Shell injunction is by no means an isolated incident and comes as part of a wider crackdown by the Venezuelan tax authorities on foreign firms, which, the government claims, may owe up to US$3 billion in unpaid taxes resulting from deals struck under the leadership of former President Rafael Caldera in the 1990s.

Around two dozen oil companies including Chevron, BP and Total are reportedly under investigation in Venezuela.

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