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HMRC internal manual

Double Taxation Relief Manual

From
HM Revenue & Customs
Updated
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Venezuela: Dividends

The Venezuelan tax deducted from dividends at the agreement rate of 10 per cent qualifies for credit as a direct tax (see INTM164010(c)). Dividends are, however, exempt from tax in Venezuela if paid to a United Kingdom company which controls, directly or indirectly, at least 10 per cent of the voting power of the company paying the dividend.

The reduced rate and exemption do not apply if the dividends are effectively connected (see INTM153110 fifth sub-paragraph) with a business carried on through a permanent establishment or fixed base which the recipient has in Venezuela.

A United Kingdom company controlling, directly or indirectly, at least 10 per cent of the voting power of the Venezuelan company paying the dividend is entitled, under Article 22(1)(b), to credit for underlying tax (see INTM164010(d)).