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4 April 20231 minute read

Brazil: Brazilian Government issued provisional measure establishing taxation on exports of crude oil

Country-specific update: Brazil

On 1 March 2023, the Brazilian Government issued Provisional Measure #1,163/2023 (“MP 1,163/23”), which establishes a 9.2% tax rate on crude oil exports for the next four months.

According to the Ministry of Finance, the establishment of the export tax has a regulatory nature and should stimulate new investments in the refining sector in Brazil.

Companies will be subject to higher costs when selling crude oil abroad. Historically, crude oil exports were not taxed, and the measure is raising concerns in the sector as it could affect the country’s competitiveness on the international market.

This new export tax is part of a package of measures announced on 27 March 2023, which aims to offset the partial reintroduction of federal taxes on gasoline and ethanol (PIS/COFINS and CIDE).


Key takeaway

Exporters of crude oil are impacted by this change. Some have gone to court claiming that the new tax is unconstitutional. It is important to note that the provisional measure will now be analysed in the plenary sessions of the Chamber of Deputies and the Senate, which may make amendments to the original text.