Sign In

   

Normative Ruling No. 1.781/2017 - Repetro-Sped

10Jan2018Jan10,2018
Tax

On January 2, 2018, the federal official gazette published Normative Ruling No. 1,781/2017 ("NR 1,781"), which regulates a special customs regime for goods to be used in exploration, development and production of oil and natural gas ("Repetro-Sped").

Repetro-Sped was originally regulated by NR 1,743/2017 ("NR 1,743") as detailed in our Memorandum to Clients of October 02, 2017, which has been revoked upon the enactment of NR 1,781.

Broadly speaking, NR 1,781 regulates the customs and tax treatment introduced by Law No. 13,586, of December 28 2017, which resulted from the conversion into law of Provisional Measure No. 795, of August 17 2017, and amends Normative Ruling No. 1,415, of December 4, 2013 ("NR 1,415") and Normative Ruling 1,600, of December 14, 2015 ("NR 1,600"), which regulates the Repetro regime and the temporary admission regime, respectively.

Regarding the customs and tax treatment introduced by Law No. 13,586/2017, although NR 1,781 reproduces a significant set of rules already provided under the revoked NR 1,743, certain changes are worth noting, as summarized below. 

1. Restriction on temporary importation of goods for economic use with or without relief from federal taxes. 
Pursuant to NR 1,743, goods covered by rental, assignment, lease or bareboat charter contracts had to be imported by the relevant service provider or operator, but the importer was not required to be the entity responsible for effecting the cross-border payments. NR No. 1,781 expressly stipulates that the rules for temporary importation of goods, with or without relief from federal taxes, are not applicable to cases in which the goods covered by such contracts are not imported directly by the entity responsible for the cross-border payments.

2. Restriction on temporary admission with total relief from federal taxes for the importation of production platforms and floating production and storage units ("FPSO").  NR 1,781 introduces new wording, in relation to what was previously introduced by NR 1,743 and that was severely criticized by the industry at the time, regarding the above restriction. Pursuant to NR No. 1,781, production platforms and FPSO may only be imported temporarily, and granted federal tax relief, if the charter, rental, assignment or lease contract of the goods is executed at the same time as the service contract for operating the platform or FPSO and if the lessor and operating companies under these contracts are not related to the contracting concessionaires which hold the production rights. It appears that this new wording seeks to clarify that the lessor and the contracting operator/concessionaire may not be related parties in order to qualify for tax relief in respect of the temporary importation of FPSO;

3. Transfer of Repetro-Sped tax relief applicable to permanent importation and to national industry. NR 1,781 includes the possibility of tax relief for permanent importation of goods, purchases in the domestic market or importation of raw materials, intermediate products and packaging materials to be transferred to a new beneficiary, which qualifies under the Repetro-Sped, during the effectiveness of the regime. 

4. Inapplicability of the permanent importation special regime for cabotage vessels, inland navigation, port support navigation and maritime support navigation. Mirroring the restriction introduced by Law No. 13,586/2017, NR 1,781 establishes that the permanent importation regime within Repetro-Sped does not apply to the importation of vessels for cabotage navigation, inland navigation, port support navigation and maritime support navigation.

5. Treatment relating to a change of: (i) the entity holding the concession, authorization or assignment; or (ii) the entity contracted as an authorized operator under a production-sharing regime. Although NR No. 1,781 maintains the rule that establishes the effectiveness of the Executive Declaratory Act – ADE granted to the original operator until the completion of the procedure necessary to replace the beneficiary of the regime, a subtle change must be noted. While NR 1,743 stipulated that the change of operator did not invalidate the “ADE which qualified the former operator under Repetro-Sped”, the wording of NR 1,781 only provides that the change of operator does not invalidate the “ADE of the former operator". In our view, such change may be due to the Brazilian Federal Revenue taking the view, as expressed through the "Questions and Answers on Repetro-Sped", available on its electronic website, that such rule also applies to goods imported under Repetro;

6. Change of rules relating to the provision of guarantees. NR 1,781 amends specific rules on guarantees. It is worth noting, in particular, the provision relating to the minimum net equity required for guarantees provided by companies, which is set as: (i) 5 (five) times the value of the guarantee to be provided; or (ii) greater than R$ 10,000,000.00 (ten million reais), which is twice the amount previously established by NR 1,600. In addition, NR 1,781 establishes that the analysis concerning the acceptance of letters of guarantee (fianças) will be carried out prior to filing the application for the regime, and will not be accepted: (i) where the value of the tax credit guaranteed is greater than the sum of the net equity of the guarantor and the guaranteed party; (ii) the value of the guarantee to be provided by the guarantor in respect of different guaranteed parties exceeds twice the value of its net equity; or (iii) if the amount by which the guaranteed tax credit exceeds the sum of the net equity of the guarantor and the guaranteed party is greater than 50% (fifty per cent.) of the guarantor's net equity. 

7. Inclusion of rules regarding the conformity of the application for Repetro-Sped. NR 1,781 stipulates rules to ensure the conformity of applications for the Repetro-Sped regime, including, among other aspects, the period of effectiveness of the regime, which depends on the channel used for parameterization of the import declaration registered by the importer (green or yellow), and the procedures to be followed in cases of requests for the extension of the regime, re-admission, permanence in a non-bonded site or if the request for the regime is denied;

8. Inclusion of different rules regarding the application for, and control of, Repetro-Sped. NR 1,781/2017 replicates for Repetro-Sped specific rules already provided by NR 1,415 in relation to Repetro and includes other specific rules concerning the application for, and control of, Repetro-Sped, such as: (i) the granting of Repetro-Sped in the case of temporary admission for economic use; (ii) the requirements and deadlines for applying for Repetro-Sped; (iii) new admission to the regime in cases of substitution of a beneficiary or expiry of the period during which goods may remain in Brazil without any prior request for the extension or termination of the regime; (iv) the simplified procedures regarding ancillary goods to be transferred for use in relation to a different principal good and remittance of goods for tests, repair or maintenance; (v) the termination of Repetro-Sped; and (vi) the procedures to be followed in the event the application for Repetro-Sped is rejected or in the case of non-compliance with its rules.

9. Migration from Repetro to Repetro-Sped. As already established in the "Questions and Answers on Repetro-Sped", NR 1,781 stipulates that the migration from Repetro to Repetro-Sped between January 1, 2018 and December 31, 2018, will be carried out by means of a simplified procedure to be defined by the General Coordination of Customs Administration – COANA, which includes cases of replacement of the beneficiary. All migrations after January 1, 2019, will be carried out by means of a regime transfer procedure.

10. Temporary admission with total relief for vessels and platforms docked and anchored. NR 1,781 expressly prohibited vessels or platform from being docked and anchored to structures, located in areas of oil and natural gas production, prior to the granting of the temporary admission regime for economic use or after the expiry of the regime.

As to the amendments introduced by NR 1,415, NR 1,781 replicated for Repetro the restrictions on temporary importation of goods already applicable to Repetro-Sped, and changed specific rules concerning the application for, and control of, Repetro, also reflecting existing Repetro-Sped regulations (e.g., expiry of the regime, new admissions, simplified procedures and termination of the designated company).

Finally, NR 1,781 amends specific sections of NR 1,600, in particular, the inclusion of rules for permitting of vessels or platforms to remain docked or anchored in Brazil with total relief from federal taxes prior to the concession of the temporary admission regime for economic use or, after termination of such regime, for a period of: (i) 6 (six) months, automatically extendable for an equal period if the vessels or platforms are registered with the Brazilian Special Registry, or (ii) 30 (thirty) days, automatically renewable for an equal period if they are not registered with the Brazilian Special Registry. Other rules regarding guarantees, as briefly mentioned above in item 6, were also amended by NR 1,781. 

NR 1,781 came into effect on January 2, 2018, the date of its publication in the official gazette.


Clique aqui para download do arquivo em pdfClick here for pdf file
See our recent publications