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Legal Update

Law No. 13,586/2017: Conversion Into Law of Provisional Measure No. 795/2017 with New Tax Treatment of Oil and Gas Activities in Brazil

29 December 2017
Tauil & Chequer Legal Update

On December 29, 2017, Law No. 13,586/2017 (“Law”) was published in the Official Gazette rendering effective, with some slight modifications, the Provisional Measure No. 795/2017 (“PM 795”), which created a new tax treatment for oil and gas activities in Brazil.

Among the modifications, it should be highlighted:

  1. The express reference that the rules related to the simultaneous execution of charter or lease agreements for sea vessels/rigs and of the service provision agreements related to the paragraphs 3, 4, 5, 6, 7, 8 and 12 of Article 1 of Law No. 9,481/1997, as modified by the new Law herein addressed, are also applicable to the activities of transportation, handling, transfer, storage and regasification of liquefied natural gas;
  2. Inclusion in paragraph 10 of Article 1 of Law No. 9,481/1991 prohibiting retroactive use of the limits for the application of 0% WHT (Withholding Tax) rate to vessels used in maritime support navigation, regarding events that occurred prior to the enactment of Law 13,043/2014;
  3. Article 3, paragraph 7 establishes that the tax transaction applicable to events that occurred up to December 31, 2014, do not apply to vessels/rigs used in maritime support navigation since they are expressly excluded according to item “(ii)” above;  
  4. Inclusion of a new paragraph in Article 5 (new paragraph 2), resulting in the alteration of the numbers of all following paragraphs, expressly prohibits the granting of special regime with the suspension of payment of federal taxes on goods whose permanence in the country relates to the importation of vessels destined for cabotage (coasting navigation), inland waterways navigation, maritime support navigation, and port maritime navigation;
  5. Paragraph 6 of Article 5, which corresponds to the current paragraph 7 of the same article, was vetoed — which allowed the Federal Revenue Office to extend the term of 3 (three) years by a further 12 (twelve) months for the beneficiary of the permanent import regime (with suspension of federal taxes) to destine the goods for activities of exploration, development and production of oil, gas and other hydrocarbons. Therefore, the beneficiary of the new permanent import regime must within 3 (three) years from its import use the imported goods under penalty of payment of the suspended federal taxes;
  6. Included in Article 6 are two new paragraphs - 10 and 11 - of which: 
    • Paragraph 10 establishes the 3 (three) year term for the buyer in the domestic market of raw materials, intermediary products and packing materials with the suspension of federal taxes, to be used in the activities related to the exploration, development, production of oil, natural gas and hydrocarbons, under penalty of payment of the suspended taxes, with added interest and penalties;
    • Paragraph 11 allows the Federal Revenue Office to extend the 3 (three) year term established in paragraph 10, mentioned above, by 12 (twelve) months.
  7. The possibility of using the permanent import regime with the suspension of federal taxes, as well as import or acquisition in the domestic market with the suspension of federal taxes of raw materials, intermediary products and packing materials has been extended to December 31, 2040 (previously the Provisional Measure had established the possibility only until July 31, 2022); and
  8. The President of the Republic vetoed the inclusion of paragraph 8 of Article 3, as well as paragraph 13 of Article 6, whose provisions were not included in the Provisional Measure, but only in the Bill of Law.


  • Carolina M. Bottino
    T +55 21 2127 4217
  • Rachel Delvecchio
    T +55 21 2127 4210

Related People

  • Ivan Tauil
    T + 55 21 2127 4213
  • Guido Vinci
    T +55 21 2127 4230
  • Eduardo Maccari Telles
    T + 55 21 2127 4229
  • Ana Luiza Martins
    T +55 11 2504 4626
  • Celso Grisi
    T +55 11 2504 4671
  • Luís Inácio Lucena Adams
    T +55 61 3221 4321
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