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Entry into force on 23 December 2004, effective as from 1 January 2005 — Orbitax Tax News & Alerts

The maximum withholding tax rates are:

-   10% on dividends in general and 5% if the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends;
-   10% on interest in general and 5% on the amount of the interest in the case of banks. Interest arising in one of the states and paid to the government (as defined in the treaty and including central banks and other banks and institutions) of the other state is exempt from tax in the first-mentioned state; and
-   10% on royalties. The definition of royalties includes payments for the use of, or the right to use, industrial, commercial or scientific equipment.

Both states provide for the credit method to avoid double taxation. In addition, Venezuela provides for the exemption with progression method.