Rio de Janeiro, February 28 2005 PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA], a Brazilian international energy company, announces that on February 24, 2005, the 6th Chamber of the 1st Taxpayers' Council of the Ministry of Finance denied the two Voluntary Appeals filed by the Company, confirming the previous position of the Federal Revenue Office in Rio de Janeiro, in the sense that the benefits of non-taxation and zero rate related with Withholding Income Tax do not apply in the case in question of Remittances Abroad for chartering Mobile Platforms, since they are allegedly not ships.
Although the result of this judgment was unfavorable to the Company, it is appropriate to point out that the final outcome was the responsibility of the President of the Chamber, who, according to the internal regulations, was responsible for the deciding vote, to break the tie between the Counselors of the Ministry and those representing the Taxpayers.
From the technical point of view, the arguments expounded by the Company persuaded half of
the voting Counselors, which leads the Company to continue to challenge, although at the administrative level, similar notifications, since the chances of a successful outcome at this first level of discussion are good.
As soon as the Company is notified of the ruling, it will appeal to the higher level, where the scope includes an appraisal of the tax assessments in question.
The Brazilian Navy considers all the movable platforms object of the levy of taxes to be ships; the reason is that, in the past, in analogous situations, the benefits of non-taxation and the zero rate were already recognized by the Federal Revenue, by means of formal manifestations that have never been revoked.
Remittances Abroad - Chartering of Mobile Platforms