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Provisional Measure changes tax rates in fuel operations and establishes taxation on crude oil exports

March 1st, 2023

Through Provisional Measure (“MP”) No. 1,163/2023 published on March 01, 2023, the Federal Government changed the rates of the contributions imposed on gasoline, aviation kerosene, and vehicular natural gas until June 30, 2023, as follows:

	PIS	PIS-Import	COFINS	COFINS-Import	CIDE**
Gasoline and streams	BRL 83.8380 per m3*	BRL 83.8380 per m3	BRL 386.160 per m3	BRL 386.160 per m3	zero
Aviation kerosene	zero	zero	zero	zero	No change
Natural gas for vehicles	zero	zero	zero	zero	No change

* cubic meter
** Contribution for intervention on the economic domain

The rates for the Social Integration Program (“PIS”) and the Contribution for the Financing of Social Security (“COFINS”) contributions related to alcohol, including for fuel purposes, were also changed, until June 30, 2023, as follows:

	PIS	COFINS
Producer or importer	BRL 3.60 per m3	BRL 16.40 per m3
Sales carried out directly by a cooperative to retail traders, regarding the portion provided for in item “b” of item I, paragraph 4-D, article 5 of Law No. 9,718/98	BRL 1.64 per m3	BRL 7.53 per m3
Sales carried out per distributor	zero	zero

In addition to these changes, MP 1,163/2023 extended until December 31, 2023, the suspension of PIS and COFINS imposed on domestic acquisitions and oil imports made by refineries for fuel production, with regard to naphtha inputs, other mixtures (aromatics), partially refined petroleum oil, other crude petroleum or mineral oils (condensed), and N-Methylaniline. This suspension will be converted into a zero rate after these inputs are used in fuel production.

Finally, MP 1,163/2023 established the taxation, at a 9.2% rate, on exports of crude petroleum oils or bituminous minerals, classified under the Mercosur Common Nomenclature (NCM) code 2709, effective until June 30, 2023.

Demarest’s Oil and Gas and Tax teams are monitoring new developments within the sector and are available to provide any further clarifications that may be necessary.