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BRAZIL: House Passes Bill To Exempt Oil And Gas Companies From Taxes

(Agencia CMA Latam) - The Brazilian House of Representatives passed a presidential decree exempting oil and gas exploration companies from paying taxes. The government estimates that it will give up R$ 576.75 million (US$ 178 million) in taxes from 2018 to 2020. The decree still needs approval from the Senate.

The legislation changes tax rebate rules for investments so that oil companies can deduct their capital expenditure in exploration and production from their taxes on profit. Deductible expenses include the purchase of machinery and equipment to develop fields.

Companies would also be exempt from taxes on the import or local market purchases of raw materials, intermediate products, and packaging materials to be used to make a final product resulting from oil exploration activities.

The government claims that the decree will encourage foreign companies to bid on oil blocks auctions.

by Agencia CMA Latam

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