The IBFD has received the English and Spanish texts of the double taxation treaty and protocol between Venezuela and Trinidad & Tobago, signed on 31 July 1996. The treaty was concluded in the Spanish and English languages, and both texts are equally authentic.
Under the treaty, the maximum withholding tax rates are:
- 10% on dividends, but 5% if the beneficial owner is a company which holds directly or indirectly at least 25% of the company paying the dividends;
- 15% on interest, but the usual exemptions for interest paid to public bodies, etc. apply; and
- 10% on royalties; the definition of "royalties" generally follows the OECD Model Convention, but payments for the operation of mines, oil or gas wells, quarries or other natural resources are specifically excluded.
A permanent establishment includes (a) a building site or construction project which lasts for more than 6 months, (b) a drilling rig or ship used for or in connection with the exploration of or prospects for natural resources (c) an installation or assembly project which lasts for more than 3 months, and (d) an agent who habitually maintains in the source country a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise.
Trinidad & Tobago will grant an ordinary credit to eliminate double taxation and, which respect to dividends, will further grant a credit for the underlying tax if the Trinidad & Tobago company receiving the dividends holds at least 25% of the voting shares of the paying company.
Venezuela will apply the exemption method, but it is provided that, if it changes its territorial system to a world-wide system of taxation, it will generally apply the ordinary credit method.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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