Brazil has published the National Congress Act 53 of 10th October 2017 in the Official Gazette for extending the Provisional Measure (PM) 795/2017 of 18th August 2017. Provisional Measure (PM) 795/2017 provided for the tax treatment of oil exploration and development activities or natural gas, as well established a special tax regime for the oil and gas industry.
PM 795/2017 terminates uncertainties concerning the tax treatment of exploration and production expenses for oil and gas. PM 795/2017 provided that, REPETRO will benefit not only temporary imports but also permanent imports with the suspension of federal taxes (Import Duty, IPI and PIS/COFINS-importation). The Special Import Regime will apply to taxable events from January 2018 to 31st July 2022. Provisional Measure No. 795/2017 also provided that, purchases of inputs used to manufacture products intended for the exploration, development or production of oil and gas will benefit from a suspension of federal taxes from January 2018 to 31st July 2022. PM 795/2017 therefore is valid for a period of 60 days and can be extended for 60 days more.
