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New clarifications on the definitive imports under Repetro-Sped

 

The Brazilian Fiscal Authority has again updated the “Questions and Answers” contained in the Repetro Manual, and included important clarifications regarding the definitive modality of importation within the scope of Repetro-Sped.

Firstly, the possibility of replacing the beneficiary was confirmed, before the end of the 5 year suspension period, in relation to goods imported under the definitive modality of Repetro-Sped.

Therefore, provided that the destination of the goods is preserved – which is ensured by the need for the new beneficiary to be also entitled to the Repetro-Sped – the permanently imported good in the scope of Repetro-Sped may be resold to another similar beneficiary , which will assume responsibility for the suspended taxes and other obligations inherent to the regime for the remaining 5 years.

The replacement of the beneficiary must be requested and, once approved, will be carried out with a physical verification waiver, and without the need to register a new import declaration.

In addition, the Authorities also added clarification on the extinction of Repetro-Sped, in the definitive import modality.

At first, it was indicated that it was impossible to apply all the forms of extinction referred to in art. 27, of IN1,781 / 17, which refers to the modalities of termination of the regime of temporary admission under Repetro-Sped.

However, the Authorities have confirmed that, after the actual disposal of the asset, the eventual abandonment of the field or block, or the impossibility of its use determined by a body of the Union, will not lead to the collection of suspended taxes.

In that context, it indicated that related assets may be (a) allocated to another field or block of the same beneficiary, (b) sold to another repetro-sped-qualified beneficiary, or (c) remain installed in the field or block, when their use is unfeasible due to regulatory or environmental issues.

Thus, in the view of the Authorities, in case of abandonment, the 5-year suspension period will not be interrupted, even if the activities are terminated and the field or block is, for example, returned to the ANP, so that , only at the end of this period will the regime be considered formally extinct.

Although the Authorities have not elaborated on the grounds for adopting such guidance, nor has it manifested itself in other everyday hypotheses, such as lost in hole, or scrapping of assets, we believe it is possible to draw a parallel with the understanding of abandonment.

In our view, using the same reasoning adopted by the Authorities in relation to abandonment, it would be possible to conclude that, in the event that, before the expiration of the 5-year suspension period, the condition of scrap (ie its purpose), or if there is a lost-in-hole event related to goods submitted to the definitive modality of Repetro-Sped, such situations would not motivate the extinction of the regime, nor would they lead to interruption of the 5-year term ( nor the requirement of suspended taxes), so that the regime would be extinguished at the end of that period, over time (as if such assets were destined for exploration, development and production).

In addition, the Authorities have clarified that the destination of imported goods in the definitive modality of Repetro-Sped can be proven through the installation, use or availability of the goods in the places indicated in the concession, authorization, assignment or production sharing contracts.

Thus, the destination requirement will already be considered fulfilled – including for the case of import prior to the contract, which involves the need to prove the destination within 3 years – when the goods are made available in the places where they will come / be used, ie even before or independently of the actual installation in the field or block, or use in the exploration, development or production activities.

 

Source: Vieira Rezende Law Firm

Categories: Uncategorized

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