Decision by the Federal Regional Court of the 2nd Region concerning the withholding income tax on remittances for platform charter payments


Rio de Janeiro, October 23, 2017 - Petróleo Brasileiro S.A. – Petrobras informs that, in a trial held on October 19, 2017, the Third Class of the Federal Regional Court of the 2nd Region rendered an unfavorable decision to the company, considering that the remittances for payment of chartering of mobile oil platforms, from 1999 to 2002, would be subject to withholding income tax (IRRF).

The legal discussion deals with the legality of a normative act of the Federal Revenue Service that guarantees a zero rate for said remittances.

The information pertaining to this matter is included in the financial statements for the 2nd quarter of 2017, under explanatory note 29 (Provisions for legal proceedings - item 29.3 - Contingent liabilities). The present process, which the updated debt is around R$ 8.8 billion, has a distinct legal ground from the other contingencies listed in the same item of the exploratory note, which also deal with IRRF on chartering, and therefore, there is no impact of this decision on the other processes.

Petrobras will appeal for the defense of its rights, when it is summoned to aforementioned decision.