FROM THE OFFICE OF PUBLIC AFFAIRS

The Treasury Department announced Monday that delegations from the United States and Venezuela have reached agreement on an income tax treaty.

The text of the new treaty was initialed in Washington, D.C. on August 28, 1998, by Patricia A. Brown, Treasury Department Deputy International Tax Counsel, and Eduardo Wallis Olavarria, National Tax Superintendent, SENIAT (Servicio Nacional Integrado de Administracion Tributaria). The initialing confirms a mutual commitment to move forward as quickly as possible to signature and ratification of the new treaty.

The treaty follows closely the pattern of recent U.S. income tax treaties and the Organization for Economic Cooperation and Development (OECD) Model income tax treaty. The agreement significantly reduces tax-related barriers to trade and investment flows between the United States and Venezuela. It also establishes many ways in which the fiscal authorities may assist each other in tax administration, and also contains comprehensive anti-treaty-shopping rules.

"The double tax agreement, the first between Venezuela and the United States, reflects our interest in expanding our Latin American tax treaty network," said Treasury Deputy Assistant Secretary for International Tax Affairs, Joseph H. Guttentag. "It is a part of our continuing efforts to remove all untoward barriers to desirable cross border economic activities and to promote financial integration in this important part of the world."

The text of the new treaty is not yet publicly available.