Tax suspension can be granted for imports made under the Replat regime, as long as the imported goods are destined for the construction of platforms that will be used for the exploration of oil and natural gas.
Brazil has various tax and customs regimes to increase the foreign trade of certain goods. Some of them are directly related to the oil and gas sector, as Replat, which is the short form used to refer to Regime Aduaneiro Especial de Entreposto Aduaneiro em Plataformas Destinadas à Pesquisa e Lavra de Petróleo e Gás Natural em Construção ou Conversão no País.
The name might be complex, but the regime itself is not that much. Under Replat, goods and materials can be imported to Brazil with tax suspension. Such goods must be destined for the construction of ships, platforms and similares, as long as they are related to the exploration or extraction of oil and natural gas.
In this regime, the beneficiaries are companies established in Brazil and contracted by a foreign company. Their service must consist of the construction or conversion of goods listed by Receita Federal, which includes:
- Shuttle tanker
- Supporting ships
- Floating Production Storage and Offloading (FPSO)
- Pipelay Support Vessel
The ship/platform must be under construction in Brazil and they must be exported to another country after they are built. Brazilian law states that the Replat regime can be operated in the following environments:
- In the goods being constructed or converted, in case of a platform;
- In a shipyard;
- In industrial facilities being used to build the goods listed by Receita Federal;
- In port facilities.
The taxes suspended by Replat are:
- II – Import Tax, or Imposto de Importação
- IPI – Tax on Industrialized Products, or Imposto sobre Produtos Industrializados
- PIS/PASEP – Social Integration Contribution, or Programa de Integração Social
- Cofins – Social Security Financing Contribution, or Contribuição para o Financiamento da Seguridade Social
Requirements to operate under Replat
Companies seeking tax benefits offered by Replat must fulfil some requirements imposed by the Federal Revenue Secretariat, in addition to already being established in Brazil and contacted by a foreign company.
The Brazilian company must be hired to build platforms destined for the exploration of oil and gas, modules or maritime structures related to this activity. The hired company must also successfully prove that it does not have any unresolved debts with the Federal Revenue.
It must also use a Computerized Control System which is accessible by the Federal Revenue at all times. This system must be used to register goods entering or leaving the operational area, as well as the registration and verification of owned tax credits.
The application to Replat must be made through a form available from Receita Federal. In addition to the form other documents must be presented:
- Constitutive Act or Articles of Association
- Copy of the contract for the construction or conversion of goods related to the research or extraction of oil and natural gas
- Technical documentation related to the Computerized Control System
- Description of the industrialization process and schedule of the steps that will be executed
- List of the products that will be industrialized and their classification in the Mercosul Tax Classification (NCM)
- Chart of accounts
- Estimates of loss or breakage
The Replat regime is classified as a bonded warehouse regime. Goods being admitted into the regime require an Import Declaration (DI, or Declaração de Importação), and their admission might happen with or without currency hedging.
The Replat regime is considered extinct when the goods being built are finished and exported to a foreign country. There are also other conditions that would result in the regime extinction:
- Re-export of the goods that were imported
- Transfer of the imported goods to another special customs regime, as long as the goods are kept under the original conditions, without modifications
- Customs clearance of the imported goods, if they are destined for consumption in Brazil under the original conditions, without modifications
- Destruction of the goods, paid by the interested parties and under customs control
After the Replat regime is extinct, suspended taxes must be paid. Accrued interest and additional expenses must apply.