On May, 16th, State of Rio de Janeiro published resolution SEFAZ No. 631/13, which converted into an ICMS calculation basis reduction, the ICMS tax exemption previously granted by article No. 2, Decree No. 41.142/2008 on importation of goods and products listed in its Annex under the Temporary Admission Special Regime, designated to oil and gas exploration sites, as set forth by the REPETRO Regime federal legislation.

However, on May 21, this resolution was rectified in order to encompass the ICMS tax exemption granted by article No. 5, I, III and 1st paragraph of Decree No. 41.142/2008. Accordingly, from now on, the State of Rio de Janeiro also converted into ICMS calculation base reduction, the ICMS exemptions previously granted: (i) on the importation of equipment to be used exclusively in the exploration phase of oil and natural gas, (ii) on equipment connected to the phases of exploration and production which enter into the country to perform services for a temporary period of less than 24 months, and (iii) machinery and spare-part equipment, tools and other parts, to ensure the operation of goods listed in (i) and (ii).

This tax burden must be equivalent to 1.5%, without ICMS credits.

The reduced calculation basis provided in Resolution SEFAZ n.º 631/13 will be effective until December 31st, 2016.

For more information, please contact Ivan Tauil, Carolina Bottino or Igor Oliveira.