Portuguese 
English 
Spanish 
3 min of reading 
The Municipality of Rio de Janeiro Charged the Tax by a Oil Drilling Company That Had Already Collected It in Two Other Cities
The State Justice of Rio de Janeiro granted a favorable decision to the service provider company in the oil and gas sector in a lawsuit to annul a tax debt proposed against the municipality of Rio de Janeiro. The court ruled that the company should not collect the Service Tax (ISS) to the city of Rio de Janeiro for drilling services and oil exploration carried out for Petrobras. This is because the tax owed had already been paid in the cities where the services were conducted in Catu (Bahia) and Mossoró (Rio Grande do Norte). The law firm Cescon Barrieu Advogados represented the case.
According to the partner at Cescon Barrieu in the tax area, Rodrigo Bevilaqua, it is common for companies that carry out drilling and oil exploration services to mobilize large structures that include rigs, machinery, and human resources working 24 hours a day in small towns, which characterizes true autonomous operational units that move resources in the city.
“Even if there is no legal regularization of this structure, it is recognized that there is a temporary or provisional establishment in fact. If it can be proved that this structure exists, taxes are collected in the location where the activity is being developed, even if the company issues the invoice from its headquarters, which usually occurs in Rio de Janeiro or São Paulo. There is a direct impact of that economic activity on the life of the municipality, which is why the law recognizes the figure of the temporary establishment and imposes the tax payment in that locality,” he explains, reinforcing that this understanding is based on Complementary Law 116/03.
-
BRICS breaks the barrier of US$ 1 trillion in internal trade, accelerates the weight of the Global South, and pressures Brazil to react in the new economy.
-
Electrolux surprises, closes colossal factory and lays off 400 people in a mass dismissal that will have a direct effect later this year, following a cost review, with an impact of R$ 272.5 million and R$ 109 million in cash in Chile.
-
The Lula government is pursuing re-election and is therefore preparing a package with discounts of up to 80% on debts, subsidies for diesel, gas for 15 million, and energy, after reaching 51% disapproval six months before the election.
-
The chamber approves a project that transforms plots of up to 2,000 square meters into official rural properties, allowing thousands of small producers who were invisible to the government to now access credit, tax exemptions, and technical assistance.
Rodrigo explains that the rules regarding the location of the ISS collection create insecurity for companies that move large structures not only in the oil and gas sector but also in other sectors, as there may be double taxation, both in the city where the service is performed and the temporary establishment is set up, as well as at the headquarters of the company that issues the charge against the client.
“The law has its rules, but its application still generates many discussions. It is up to the company to demonstrate that the collection has already been correctly made, including demonstrating the existing structure on-site capable of configuring an economic or professional unit able to provide the contracted services,” he emphasizes.
About Cescon Barrieu
Cescon Barrieu is one of the leading law firms in Brazil, working in an integrated manner across five offices in Brazil (São Paulo, Rio de Janeiro, Belo Horizonte, Salvador, and Brasília) and also in Toronto, Canada. Its lawyers stand out for their commitment to defending their clients’ interests and their work in highly sophisticated operations, often unprecedented in the market. The firm’s goal is to always be the first choice of its clients for their most complex legal issues and most strategic matters. www.cesconbarrieu.com.br
Seja o primeiro a reagir!