July 30 (investnews.com.br) A recent decision by CARF (Administrative Council of Tax Appeals) overturned a tax claim of approximately R$ 400 million against Petrobras and set a precedent for other oil companies operating offshore platforms—including those in Brazil’s pre-salt fields, where production takes place entirely at sea. The ruling was announced earlier this week.
The dispute centered on the importation of a “flotel”—a vessel used to house workers on offshore structures. Because the flotel remains physically attached to the platform, it eliminates the need for daily commuting via helicopter or smaller vessels.
Due to the distance from the coast, these workers typically spend weeks living on the platforms. Unlike a drillship or a production platform, a flotel does not extract oil; its function is purely logistical and supportive.
By ruling in favor of Petrobras, CARF set a precedent that contradicts the Federal Revenue Service’s interpretation of Repetro-Sped, the special tax regime for the oil and gas industry.
Repetro-Sped allows for the suspension of Import Duty, PIS, and Cofins taxes on equipment temporarily brought into the country for oil and derivative exploration and production activities.
In practice, this prevents companies like Petrobras from having to pay taxes on high-value assets that may leave Brazil once contracts expire. Consequently, the regime is a key component of the industry’s cost structure, and any change to its scope affects the entire sector.
The manual governing the regime—which Federal Revenue auditors follow—lists flotels as examples of vessels ineligible for the tax benefit, arguing that housing personnel does not constitute an activity directly supporting exploration or production.
This assessment can now be challenged by other taxpayers in similar situations. Background
It was this prohibition that the Federal Revenue Service cited when it issued a tax assessment against Petrobras for R$ 298.2 million in April 2024, regarding the vessel’s importation in October 2019. Adjusted for the CDI interest rate, the amount now totals approximately R$ 400 million.
Petrobras had already won this dispute at the initial administrative level. A Federal Revenue panel concluded, by a majority vote, that the flotel is essential to platform operations and that the law permits this classification. Because the amount at stake was substantial, the case automatically proceeded to a new review by CARF (Administrative Council of Tax Appeals) following an ex officio appeal filed by the National Treasury.
At CARF, the rapporteur, Mateus Soares de Oliveira, upheld this view. In his opinion, he directly countered the logic behind the Federal Revenue’s prohibition: “this is not a hotel on the high seas, a fishing vessel, or one dedicated to unrelated activities.” In his view, it makes no sense to separate the transport and accommodation of workers from the support, maintenance, and security activities already authorized by the Repetro-Sped legislation itself.
The panel also overturned an additional 1% fine imposed because the Federal Revenue Service deemed the vessel’s description at the time of importation to be incomplete. The councilors found the information provided to be sufficient. The vote ended 4 to 2.
According to the rapporteur, the panel has accepted Repetro-Sped classification whenever a company demonstrates that the vessel performs maintenance and security activities on the platform itself; this was the criterion applied in the Petrobras case.
“To the extent that the flotel provides this safety for the platform, it becomes relevant and essential to oil and natural gas exploration and research activities,” Soares told InvestNews.
Impact on the sector
Beyond the amount recovered by Petrobras, the decision is of interest to other companies operating in Brazil’s pre-salt fields, where all exploration takes place offshore. Shell, TotalEnergies, Equinor, CNOOC, and Petrogal (Galp) already produce oil in the region, and other oil companies—such as ExxonMobil, Repsol Sinopec, Petronas, and QatarEnergy—are among those qualified to bid for new blocks in recent auctions held by the ANP (National Agency of Petroleum, Natural Gas and Biofuels).
Since these fields rely on extensive offshore support infrastructure, the Carf ruling could strengthen the defense of any operator using flotels under similar conditions, although the benefit is not automatic and depends on which entity contracted and imported the vessel.
The controversy, however, is far from over. The Federal Revenue Service has already denied the same tax regime to another type of platform support vessel—a drillship under a time charter agreement—indicating that the dispute between tax authorities and operators regarding the scope of Repetro-Sped has yet to play out fully.
Brazil Energy Insight 
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