Brazil: State Law No. 15.833/2015: Financial Compensation And Government Take Resulting From Exploration And Production Of Oil And Gas

Author:Mr Ivan Tauil, Eduardo Maccari Telles, Celso Grisi, Roberta Caneca, Carolina M. Bottino and Mônica Albuquerque
Profession:Tauil & Chequer
 
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On June 18, 2015, State Law No. 15.833/2015 passed by the Government of the State of São Paulo was published in the Official Gazette. The State Law regulates the collection of financial compensation and government takes resulting from the exploration and production of oil and gas.

The State Law applies to all companies that undertake oil and natural gas exploration and production activities.  Such companies will have to provide information to the State of São Paulo Revenue Office regarding the financial compensation and government takes due to the State, pursuant to the criteria determined by Federal regulations, and allow tax auditors to enter their facilities, among other procedures required in connection with the exercise of supervision.

Fines resulting from failure to comply with the State Law can range from 20% to 100% of the monthly amount of financial compensation and government take, depending on several factors, such as the seriousness of the infraction.

Finally, we emphasize that in addition to the penalties above, now tax authorities can determine the calculation basis in the events specified in the regulations.

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