Country Report
Brazil upstream fiscal summary
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Brazil's upstream industry is primarily licensed with a complex concession fiscal regime. From October 2013, profit sharing contracts (PSC) are used for pre-salt developments and other strategic areas. Licences are awarded in regular rounds. Concession terms primarily include a 10% royalty, special participation tax that varies with time, location and production between 10% and 40%, and a 34% corporate income tax. PSC terms mainly include a 15% royalty, 80% cost recovery ceiling, and a biddable government profit share. The latter is adjusted based on a price and production combination. Corporate income tax applies similar to concessions. A key issue in Brazil is the complex range of indirect taxes in both regimes at the federal, state and local levels. These taxes add approximately 15% to 20% to project investments and costs.
Table of contents
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Concession
- Basis
- Licence terms
- Government equity participation
- Fiscal terms
- Bonuses, rentals and fees
- Area rentals
- Environmental compensation tax (SNUC)
- Indirect taxes
- Royalty
- Landowner override
- Research and development obligation
- Special participation tax (Participação especial)
- Corporate income tax
- Fiscal treatment of decommissioning costs
- Product pricing
- Summary of modelled terms
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Production sharing contract (PSC)
- Basis
- Government equity participation
- Fiscal terms
- Bonuses, rentals and fees
- Environmental compensation tax (SNUC)
- Indirect taxes
- Royalty
- Research and development obligation
- PSC production sharing
- PSC cost recovery
- PSC profit sharing
- Corporate income tax
- Fiscal treatment of decommissioning costs
- Product pricing
- Summary of modelled terms
- Recent history of fiscal changes
- Stability provisions
-
Split of the barrel and share of profit
- Concession
- PSC
- Effective royalty rate and maximum government share
- Concession
- PSC
- Concession
- PSC
- Progressivity
- Concession
- PSC
- Fiscal deterrence
- Concession
- PSC
Tables and charts
This report includes 42 images and tables including:
- Timeline
- Split of the barrel - oil
- Split of the barrel - gas
- Share of profit - oil
- Share of profit - gas
- Effective royalty rate - onshore
- Effective royalty rate - offshore
- Effective royalty rate
- Maximum government share - onshore
- Maximum government share - offshore
- Maximum government share
- State share versus pre-share IRR - liquids
- State share versus pre-share IRR - gas
- State share versus pre-share IRR - liquids
- State share versus pre-share IRR - gas
- Investor IRR versus pre-share IRR - liquids
- Investor IRR versus pre-share IRR - gas
- Investor IRR versus pre-share IRR - liquids
- Investor IRR versus pre-share IRR - gas
- Wood Mackenzie standard indirect tax assumptions
- Special Participation Rates (%) - Onshore
- SPT Onshore Concession
- Special Participation Rates (%) - Shallow water
- SPT Shallow water Concession
- Special Participation Rates (%) - Deepwater
- SPT Deepwater Concession
- Brazil Concession (onshore)
- Brazil Concession (shallow water)
- Brazil Concession (deepwater)
- Total Government Profit Share with an assumed 60% bid
- Split of the barrel - oil
- Split of the barrel - gas
- Share of profit - oil
- Share of profit - gas
What's included
This report contains:
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