Presidential Decrees Nos. 2,242; 2,248; and 2,249 (Official Gazette Nos. 40,852; 40,885; 40,856 of February 19, 24 and 25, 2016, respectively) (the ''Decrees'') created: (i) the Area of National Strategic Development of the ''Hugo Chávez'' Orinoco Oil Belt (64,157.874 Km2) in order to stimulate hydrocarbon activities; (ii) the Area of National Strategic Development ''Orinoco Mining Arch'' (111,843.70 Km2) in order to stimulate mining activities; and, (iii) the Area of National Strategic Development of ''Venezuela's Fishery and Aquaculture Belt'', which includes the internal waters, the territorial sea, the exclusive economic zone, contiguous and associated areas, to stimulate the activities of sectors related to fishing, aquaculture and associated activities, with a responsible use of hydro-biological resources (jointly referred to as the ''Areas''). The Decrees entered into force on February 19, 24 and 25, respectively.

The Decrees are subject to the tax regime and the terms established on the Decree of Integral Regionalization for the Socio-Productive Development of the Country (Official Gazette No. 6,151 Extraordinary of November 18, 2014) (''Regionalization Decree''). The Regionalization Decree has the following tax benefits:

  1. The President of the Republic may establish a deferral regime for the payment of income tax payable on the income obtained by the enterprises authorized to operate within the respective Areas, until the enterprises start their regular operations, in accordance with the amortization chronogram that the President shall establish through Decree. The mixed companies created for the development of primary activities in the ''Hugo Chávez'' Orinoco Oil Belt will be in the pre-operational stage until the upgraders, despoilers or refineries start functioning, whichever occurs first.
  2. Enterprises authorized to operate within the Areas are designated as VAT withholding agents.  Such enterprises must withhold the total VAT amount invoiced by their suppliers and pay the amounts withheld to the National Treasury in accordance with the amortization chronogram that the President establishes to such effect. The suppliers will have the right to offset the VAT withheld against their final VAT liability even if the authorized enterprises have not paid the withheld amounts to the National Treasury.
  3. The National Executive Power may create new customs offices with special circumscriptions for the areas subject to the Decrees.
  4. Enterprises authorized to operate within the Areas may elect the direct unloading procedure in accordance with the Organic Law of Customs.

Additionally, the Decrees establish the following tax incentives:

  1. The National Executive Power may grant total or partial income tax and VAT exonerations for the purpose of achieving economic development in the Areas, applicable, exclusively, to the activities related with the production of oil, mining, and fishery and aquaculture activities. Mixed companies created for the development of primary activities related with gold in the Orinoco Mining Arch Area, will enjoy the benefits for the duration of the respective project.
  2. The Coordinator of the applicable Area, jointly with the Vice-president for the Economic Area, will encourage the conclusion of tax stability agreements between the Enterprises authorized to operate within the Areas and the relevant states and municipalities.

In addition, the Decrees established the following customs incentives:

  1. The National Integrated Service of Customs and Tax Administration (''Revenue Service'') will apply the mechanisms to expedite the following activities:
    1. Customs clearance of imported merchandise for the case of the ''Hugo Chávez'' Orinoco Oil Belt and the Orinoco Mining Arch;
    2. Importation or exportation of merchandise related to fishery and aquaculture activities.
  2. The Revenue Service may expedite granting the unique customs tariff classification in the following cases:
    1. Importation of merchandise linked to the "Hugo Chávez" Orinoco Oil Belt Area and Orinoco Mining Arch Area; and
    2. Importation and exportation of merchandise related to fishery and aquaculture activities.