Note that there is an express proviso as to the application of new percentages to the vessels used in the offshore support navigation. However, given that the PM 795 did not exclude from its text the percentages currently in force, we understand that the offshore support vessels must conservatively continue to obey the percentage of 65% after January 1st, 2018.
The PM 795 enlarged the definition of “linked persons” that started to comprise controlling interest or common administrative situations. Therefore, will be considered as linked the hypotheses in which:
• The foreign ship-owner is its parent company, branch or subsidiary firm;
• the controlling interest in the capital stock of one in relation to the other characterizes it as his controlling company or affiliated company;
• both of them are under the controlling interest or common administrative control or when at least ten percent of the capital of each one of them belongs to same individual, natural persons or legal entity;
• together with the legal entity domiciled in Brazil, he has ownership interest in the capital stock of a third legal entity, as long as the sum of the ownership interest characterize them as controlling companies or affiliated companies of this one; or
• is his associate, in the form of consortium or co-ownership, in any venture.
• LNG’s TRANSPORT, HANDLING, TRANSFER, STORAGE, AND REGASEIFICATION
The Decree 9,128 altered the Customs Regulation to include the deadline of 31.12.2040 to the REPETRO, and consequently also altered the deadline of the temporary admission of goods intended for the activities of transport, handling, transfer, storage, and regasification of LNG.
The article 2, paragraph 11,of the PM 795 laid down as of January 1, 2018, the maximum percentage of 60% for the charter portion/hire vis-à-vis the total value of the contracts for purposes of reduction the Withholding Income Tax (IRFF) to zero, when the charter contracts/hire and services are simultaneously performed between legal entities linked to one another.
• SPECIAL INSTALLMENT PROGRAMME
The PM 795 allowed the utilization of maximum charter percentages in force, as per the set forth in article 1, § 2 and 12 of Law 9,841, and created the special instalment programme for the taxable events occurred until December 31st, 2014. Such companies will be able to pay the Withholding Income Tax (IRFF) difference, increased by interest calculated with the SELIC rate, and with reduction of 100% of the late payment penalties, and automatic fines, on condition of waiving possible administrative and judicial proceedings on the subject.
The special instalment programme depends upon regulation.
• DEDUCTIBILITY RULES IN THE RESEARCH AND DEVELOPMENT PHASES
The PM 795 updates and clarifies the deductibility rules of the taxable income and the CSLL’s tax base of the amounts applied in each determination period, in the E&P activities, especially in the development phase.
During the development phase, the company can deduct the exhaustion quota, as well as in a fast-paced mode according to the Produced Units Method, as long as the price of the asset is not exceeded.
Machinery, equipment, and facilitator instruments applied in the activities of production development will be depreciated according to depreciation rates laid down by the Brazilian Federal Revenue Office.