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Petrobras Fined US$ 3.7 Billion for Tax Irregularities
03/11/2014 - 09h15
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SAMANTHA LIMA
FROM RIO DE JANEIRO
Petrobras has received five notices of violation from the Brazilian inland revenue service since October, amounting to R$8.768 billion (USD $3.7 billion). This is equivalent to 37.2% of the company's total profits in 2013, which stood at R$23.6 billion (USD $10 billion).
The company is studying all resources at its disposal, and has therefore not published the payments in its budget as probable losses.
The information is contained in a preliminary prospectus delivered yesterday by Petrobras to the Security and Exchange Commission (the institution which regulates capital markets in the United States), for the emission of bonds worth USD $8.5 billion. Making public the notices of violation is a means of warning investors about potential risks involved.
According to the document, the company was fined R$2.348 billion (USD $1 billion) in October for allegedly not paying taxes on loans from its foreign subsidiaries PifCo, Braspetro and Braspetro Oil Company, in 2009.
In December, the company was fined twice, once for failing to pay income tax at source, to the value of R$2.347 billion (USD $1 billion), and again for failing to pay R$1.539 billion (USD $655 million) in Contributions to Intervention of Economic Domain (CIDE, in its Portuguese acronym) in the chartering of platforms.
Likewise, the company was fined R$1.093 billion (USD $465 million) in early January, for non-payment of income tax and Social Contribution on Net Profit (CSLL), related to profits of its subsidiaries abroad.
The Brazilian Inland Revenue raised concerns about the first two cases before issuing the fines, and these concerns appear in the company's financial reports in 2012 and 2013. The January episode appears in the reports for 2013.
A further case occurred in January. This was a fine to the tune of R$1.442 billion (USD $614 million), for the company's failure to pay social security contributions on benefits, and on payment of medical services from third parties, between January of 2009 and December of 2011.
Translated by TOM GATEHOUSE
Read the article in the original language
Simon Townsley/Agência Petrobras |
Petrobras has received 5 notices of violation from the Brazilian inland revenue service since October, amounting to USD $3.7 billion |