The Official Gazette - DOU of February 11, 2015 published the Answer to Advance Tax Ruling Request No. 12, of the General Tax Coordination Office ("Cosit"), which formally confirmed the position of the Brazilian Federal Revenue Service ("RFB") on the zero rate withholding income tax application ("IRRF") for payment, usage, credit or remmitance due to the charter of semi-submersibles platforms to beneficiaries domiciled abroad.
This rule is provided in Article 1, Item I of Law No. 9,481 of August 13, 1997, and makes reference to the zero tax rate in cases of "revenues of freight, chartering, rents or leases of sea vessels (...)" of the beneficiaries above.
The interpretation of RFB on this benefit was always restrictive regarding the vessel concept, but was expanded in August 19, 2014, with the enactment of Cosit Answer to Advance Tax Ruling Request No. 225, which recognized the applicability of the drill ships device. At the time, RFB considered that the requesting taxpayer would lack legitimacy to formulate the query against the semi-submersible platforms chartered, so that part of the issue was left open.
In this sense, the Answer to Advance Tax Ruling Request, No. 12/15 comes precisely to complement this missing element to the August 2014 Answer to Advance Tax Ruling Request - the query was made, this time by the company owning the platforms.
This interpretation is, in fact, in line with the legislation intention to extend the concept of vessel for the purposes of Law No. 9,481/97: in accordance with Article 106 of Law No. 13,043/14, vessels are formally also those that include floating production and/or storage and discharge systems (Floating Production Systems - FPS) and those that include the type probe systems for drilling, completion, well maintenance (drill ships). Under Answer to Advance Tax Ruling Request No. 12/15, the semi-submersible platforms would be included in this second group.
As a result of Article 9 of Instruction No. 1,396 of 16 September 2013, the Answer to Advance Tax Ruling Request No. 12/15 has a binding effect under the RFB and supports the taxpayer who fits in the same hypotesis decribed by the Answer to Advance Tax Ruling Request, even if such is not questioned by the requesting taxpayer.