The Rio de Janeiro government recently approved Law 7,182/2015, which was published on December 30 2015. The law introduces a state environmental control and inspection tax (TFPG) on the control, monitoring and supervision of research, mining, exploration and production of oil and gas.

As set out in the new law, the taxable event is the regular exercise of the environmental policy power conferred by the Rio de Janeiro State Environmental Agency (INEA) on activities conducted in the state in relation to research, mining, exploration and production of oil and gas in Rio de Janeiro. On the other hand, the taxpayer is the legal entity authorised to conduct research, mining, exploration and production of oil and gas.

The tax will be applied on a monthly basis at a rate of R2.71 per barrel of oil or an equivalent unit of extracted gas and must be paid by the 10th of each month. The taxable rate will be adjusted annually on January 1 based on Rio de Janeiro's fiscal reference unit (UFIR) or, should it be discontinued, by the inflation index adopted for state tax correction.

Article 6 of the law sets out that:

  • taxpayers that have to pay TFPG are exempt from paying Rio de Janeiro's environmental control and inspection tax (introduced by Article 6 of Law 5,438/2009); and
  • up to 60% of the amount paid as TFPG can be credited against any environmental control and inspection tax owed to the Institute of Environment and Renewable Natural Resources under Law 6,938/1981 in the relevant year.

If a taxpayer fails to pay TFPG, does not pay the correct amount or fails to pay TFPG within the specified timeframe, it will be fined at a rate of 20%, calculated based on the value of the tax due (without prejudice to the existence of the latter), plus delinquent interest of 1% per month. Taxpayers must forward information related to the assessment and payment of TFPG to the state treasury and the INEA, in the applicable form, as set out by a regulation to be enacted by the executive branch.

The tax has faced strong criticism from oil companies which emphasises that, in addition to being questionable from a juridical standpoint, it may have a devastating effect on investments in the sector, both with regard to future projects and projects currently underway in the oil industry.

The concept of Law 7,182 is not new to the industry. In 2012 the Rio de Janeiro State Legislature approved a similar bill, which had a tax rate of 4% UFIR. However, this bill was vetoed by the state government.

Law 7,182 will come fully into force 90 days after its publication.

For further information on this topic please contact Godofredo Mendes Vianna at Kincaid | Mendes Vianna Advogados by telephone (+55 21 2276 6200) or email ( The Kincaid | Mendes Vianna Advogados website can be accessed at

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.