Petrobras shells out $508m to settle tax dues in Brazil

Brazilian energy firm Petrobras has paid BRL1.6bn ($508m) to settle disputes with the tax authorities and will take a charge for the amount in its second quarter financial result this year.

The state-owned company will pay around BRL1.bn ($375.8m) in tax dues and BRL400m ($125.2m) in fines and interest, it said.

Around BRL1.4bn ($438.5m) will be shown as the second-quarter charge, after taxes, reports Reuters.

Following payments of tax and interests, the amount is more than double the company’s total provisions for potential tax liabilities.

The payment was announced after CARF, a tax-adjudication body in Brazil Finance Ministry, announced that the company is liable to pay IOF, which is a financial-transaction tax. IOF was levied on Petrobras’ foreign-subsidiary operations in 2008.

The firm has to cough up BRL96bn ($30bn) in unpaid tax claims for the first quarter, according to Brazil’s Federal and state governments. It has, however, reserved only BRL708m for the tax losses which is less than 1% of the potential charges.

Earlier in the month, Petrobras chief executive Aldemir Bendine had informed that the firm intends to increase its provisions for tax liabilities.

The Brazilian government, which controls Petrobras, has been looking for ways to increase tax take as a slowing economy reduces revenue and puts its investment grade rating at risk.

Petrobras has been facing disputes regarding tax payments since 2012. The firm has decided to clear the dues now in order to put a stop to the rising bills.

The firm’s inability to pay the dues might result in a ban for its oil, natural gas and refined products imports, including gasoline and diesel fuel.