The new treaty between Venezuela and Saudi Arabia provides many new benefits for taxpayers. Taxpayers should review the treaty to determine if they qualify for any of the new benefits.

Venezuela published the Approbatory Law of the Treaty between the Government of the Bolivarian Republic of Venezuela and the Government of the Kingdom of Saudi Arabia to Avoid Double Taxation and Prevent Tax evasion Regarding Income Tax Matters, in Official Gazette No.40,819 of December 30, 2015.

The Treaty will apply to the following taxes:

a) For the Republic of Saudi Arabia, Zakat and income tax, including tax on natural gas investments

b) For Venezuela, income tax

The Treaty also includes other benefits, such as a reduced tax rate for dividends, interest and royalties as outlined below:

— Dividends. 5% of the gross dividend amount, if the recipient of the dividends is the effective beneficiary

— Interest. 5% of the gross interest amount

— Royalties and technical assistance fees. 8% of gross royalties or technical assistance fees

The Treaty will enter into force on the first day of the second month following the date of receipt of the last notice, stating that the legal procedures required by the domestic law have been met, and its provisions will have effect from January 1 of the year after its entry into force.

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