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Court Ruling Exposes Brazil's Petrobras To Back Taxes

by Mike Godfrey, Tax-News.com, Washington

15 November 2012


Majority state-owned Brazilian oil giant Petrobras has confirmed that it will be required to pay BRL4.78bn (USD2.31bn) to the Brazilian tax authority in relation to an ongoing tax dispute.

Petrobras confirmed that the Brazilian tax man had been successful in having an injunction overturned that had protected the company against having to disburse the amount until it could challenge the tax agency's claim.

The dispute relates to back taxes in relation to the company's leasing of infrastructure for offshore oil projects during the period January 1999-December 2002.

The case comes amid a change in policy at the Brazilian tax authority in respect of multinationals that have historically structured deals through foreign subsidiaries based in nations where taxes are lower than in Brazil.

Recently, the government has brought a number of high-profile tax cases, in particular against mining giant Vale. Firms under the tax microscope in this respect have contended that the claims are tantamount to double taxation.

Petrobras intends to appeal the ruling, however.

TAGS: court | compliance | tax | tax compliance | tax avoidance | energy | law | oil and gas | tax authority | offshore | multinationals | Brazil

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