The Official Gazzette of November 14, 2014, published Federal Law No. 13,043, which, among other matters, sets forth new rules for taxation on several infrastructure activities. Law No. 13,043 is as result of the conversion into law of the Provisional Measure No. 651, enacted in July 9, 2014.
Specifically with respect to the oil and gas sector, Law No. 13,043/14 amended a currently valid provision of Law No. 9,481, of August 13, 1997, which allows a zero percent withholding income tax rate (IRRF) on remittances abroad in payment for freight, charter, rent or lease of vessels or foreign aircrafts, as well as for payments of rental of containers, demurrage and other related to the use of port facilities services and commissions paid by exporters and their agents abroad.
According to Law No. 13,043/14, if (a) a charterparty or a vessel lease agreement is executed simultaneously with a services agreement, and (b) both agreements are related to the exploitation and exploration of oil and gas and entered into between affiliates or related parties, the portion of the payment relating to the charter or rent shall not exceed:
- 85% of the total amount of the contracts, in case of vessels with floating production and/or storage and offloading systems (Floating Production Systems - FPS);
- 80% of the total amount of the contracts, in case of vessels for drilling, well completion and maintenance (drill ships); and
- 65% of the total amount of the contracts, in case of other types of vessels.
For the purpose of applying the thresholds above, the owner of the vessel domiciled abroad and the service provider are deemed affiliates or related parties if they are partners, directly or indirectly, of the company which owns the chartered or leased assets.
If the thresholds are not complied with, the portion of the charterparty exceeding the thresholds must be taxed IRRF at 15% or 25% rate, even if the nature of charter is provided in the charterparty.
It must be noted that the limitation above will become effective only after January 1, 2015, and, the existing contracts are not subject to the thresholds aforementioned. However, according to Law No. 13,043/14, any renegotiation or price adjustment of the existing contracts shall observe the new rule.
Also regarding the oil and gas sector, Law No. 13,043/14 vetoed the rule originally set forth in Provisional Measure No. 651/14, which granted the benefit of reduction of the calculation basis for PIS and COFINS (in the percentages provided by Law No. 11,196 of November 21, 2005) to revenues from the sales of natural gas to chemical industries for its use as raw material in the production of alcohol by distributors authorized by the National Agency of Petroleum, Natural Gas and Biofuels - ANP.