On August 18, 2017, the Government of Brazil adopted Provisional Measure 795/2017 modifying significantly the tax laws applicable to the oil and gas sector. This state act has a temporary character as it requires approval of the Brazilian Congress to become a law. 



  • 1 harmful
  • 0 neutral
  • 2 liberalising


Presidency of the Republic of Brazil. Presidência da República. Medida Provisória Nº 795, de 17 de Agosto de 2017. Available at:

PWC. "Brazilian government updates oil and gas tax framework". Available at:

Inception date: 18 Aug 2017 | Removal date: open ended

Tax or social insurance relief

Article 1 of Provisional Measure 765/2017 sets one of the main changes introduced in this legislation: the allowance to all taxpayers to deduct the expenses incurred during the phases of exploration and/or production. In addition, it establishes the possibility of accelerated depletion of assets until December 31, 2022, for investments related to development activities. In this sense, the rate will be determined by multiplying the produced units by 2.5. Previously, only the national oil company, Petrobras, was allowed to deduct such expenses.

As to Article 2, it allows bareboat charter agreements related to vessels providing transport, handling, transfer, storage and regasification services for liquefied natural gas to benefit from a 0% withholding income tax (IRRF) for up to 60% of its remittances. Previously, this service category was not contemplated.





Inception date: 01 Jan 2018 | Removal date: open ended

Tax or social insurance relief

Another change introduced on Provisional Measure 795/2017 refers to other tax benefits, particularly to the maximum percentages benefitting from a 0% withholding income tax on remittances in the case of bareboat charter agreements. With this regard, Article 2 of the new legislation has decreased the applicable percentages as it follows starting on January 1, 2018: 

  • from 85% to 70% in the case of floating systems for production or storage and unloading;
  • from 80% to 60% for systems for drilling, completion and maintenance of wells; and
  • from 65% to 50% for other types of vessels.