21.1. |
Income taxes and other
taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
Current assets |
|
|
Current liabilities |
|
|
Non-current liabilities |
|
|
|
12.31.2018 |
|
|
12.31.2017 |
|
|
12.31.2018 |
|
|
12.31.2017 |
|
|
12.31.2018 |
|
|
12.31.2017 |
|
Taxes in Brazil
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
733 |
|
|
|
442 |
|
|
|
66 |
|
|
|
39 |
|
|
|
- |
|
|
|
- |
|
Income taxes - Tax settlement programs
|
|
|
- |
|
|
|
- |
|
|
|
56 |
|
|
|
228 |
|
|
|
552 |
|
|
|
671 |
|
|
|
|
733 |
|
|
|
442 |
|
|
|
122 |
|
|
|
267 |
|
|
|
552 |
|
|
|
671 |
|
Taxes abroad
|
|
|
6 |
|
|
|
37 |
|
|
|
89 |
|
|
|
32 |
|
|
|
- |
|
|
|
- |
|
Total
|
|
|
739 |
|
|
|
479 |
|
|
|
211 |
|
|
|
299 |
|
|
|
552 |
|
|
|
671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other taxes |
|
Current assets |
|
|
Non-current assets |
|
|
Current liabilities |
|
|
Non-current |
|
|
liabilities (*) |
|
|
|
12.31.2018 |
|
|
12.31.2017 |
|
|
12.31.2018 |
|
|
12.31.2017 |
|
|
12.31.2018 |
|
|
12.31.2017 |
|
|
12.31.2018 |
|
|
12.31.2017 |
|
Taxes in Brazil
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current / Deferred ICMS (VAT)
|
|
|
781 |
|
|
|
934 |
|
|
|
700 |
|
|
|
707 |
|
|
|
922 |
|
|
|
1,021 |
|
|
|
- |
|
|
|
- |
|
Current / Deferred PIS and COFINS
|
|
|
442 |
|
|
|
820 |
|
|
|
2,668 |
|
|
|
2,282 |
|
|
|
309 |
|
|
|
820 |
|
|
|
- |
|
|
|
- |
|
CIDE
|
|
|
22 |
|
|
|
14 |
|
|
|
- |
|
|
|
- |
|
|
|
50 |
|
|
|
104 |
|
|
|
- |
|
|
|
- |
|
Production taxes
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,757 |
|
|
|
1,605 |
|
|
|
- |
|
|
|
- |
|
Withholding
income taxes
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
308 |
|
|
|
157 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Tax Settlement Program (**)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2 |
|
|
|
648 |
|
|
|
- |
|
|
|
- |
|
Others
|
|
|
36 |
|
|
|
170 |
|
|
|
158 |
|
|
|
72 |
|
|
|
184 |
|
|
|
165 |
|
|
|
107 |
|
|
|
86 |
|
Total in Brazil
|
|
|
1,281 |
|
|
|
1,938 |
|
|
|
3,526 |
|
|
|
3,061 |
|
|
|
3,532 |
|
|
|
4,520 |
|
|
|
107 |
|
|
|
86 |
|
Taxes abroad
|
|
|
15 |
|
|
|
20 |
|
|
|
14 |
|
|
|
14 |
|
|
|
24 |
|
|
|
28 |
|
|
|
- |
|
|
|
- |
|
Total
|
|
|
1,296 |
|
|
|
1,958 |
|
|
|
3,540 |
|
|
|
3,075 |
|
|
|
3,556 |
|
|
|
4,548 |
|
|
|
107 |
|
|
|
86 |
|
(*) Other non-current taxes are classified as
other non-current
liabilities.
(**) It includes the amount of US$ 2 relating to
refinancing program (REFIS) from previous periods.
21.2. |
Brazilian federal
settlement programs
|
In 2017, the Company joined certain settlement
programs created by the Brazilian Federal Government, which enabled
the settlement of significant disputes in which the Company was a
defendant, with certain benefits, such as the use of tax loss carry
forwards and reduction in interests, penalties and related charges.
The settlement of disputes involving Brazilian Federal Tax
Authorities, Brazilian Federal Agencies and similar bodies reduced
tax disputes amounting to US$ 11,552 as shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisional
measures |
|
|
Signed into
law |
|
|
Brazilian federal settlement programs |
|
Disputes |
|
|
Amount of
relief |
|
|
Debts |
|
|
|
|
|
|
|
|
766/17 |
|
|
|
- |
|
|
Tax Settlement Program - PRT
(*) |
|
|
502 |
|
|
|
– |
|
|
|
502 |
|
|
|
|
|
|
|
|
783/17 |
|
|
|
13496/17 |
|
|
Special Tax Settlement Program -
PERT |
|
|
2,203 |
|
|
|
1,001 |
|
|
|
1,202 |
|
|
|
|
|
|
|
|
780/17 |
|
|
|
13494/17 |
|
|
Non-Tax Debts Settlement Program -
PRD |
|
|
340 |
|
|
|
113 |
|
|
|
227 |
|
|
|
|
|
|
|
|
795/17 |
|
|
|
13586/17 |
|
|
Withholding income tax on remittances for payment of
charter of vessels |
|
|
8,507 |
|
|
|
7,976 |
|
|
|
531 |
|
|
|
|
|
|
|
|
|
|
|
|
11,552 |
|
|
|
9,090 |
|
|
|
2,462 |
|
(*) Benefit of using tax loss carryforwards to
settle 80% of the debt.
The Company settled a portion of the balance of the
respective liabilities during 2017 in accordance with the terms of
the programs and, at December 31, 2017, their outstanding
amounts totaled US$ 1,545. During 2018, the Company settled a
significant part of the balance of respective liabilities carried
on the statement of financial position as presented in the table
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12.31.2017 |
|
|
Payments |
|
|
Use of tax loss
carryforwards
|
|
|
Inflation
indexation
|
|
|
Others |
|
|
CTA |
|
|
12.31.2018 |
|
PRT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
153 |
|
|
|
– |
|
|
|
(136) |
|
|
|
– |
|
|
|
– |
|
|
|
(16) |
|
|
|
1 |
|
Other taxes
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
Total
|
|
|
153 |
|
|
|
– |
|
|
|
(136) |
|
|
|
– |
|
|
|
– |
|
|
|
(16) |
|
|
|
1 |
|
PERT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
744 |
|
|
|
(56) |
|
|
|
– |
|
|
|
43 |
|
|
|
(17) |
|
|
|
(107) |
|
|
|
607 |
|
Others taxes
|
|
|
40 |
|
|
|
(60) |
|
|
|
– |
|
|
|
2 |
|
|
|
16 |
|
|
|
2 |
|
|
|
– |
|
|
|
|
784 |
|
|
|
(116) |
|
|
|
– |
|
|
|
45 |
|
|
|
(1) |
|
|
|
(105) |
|
|
|
607 |
|
PRD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production taxes
|
|
|
87 |
|
|
|
(95) |
|
|
|
– |
|
|
|
2 |
|
|
|
5 |
|
|
|
1 |
|
|
|
– |
|
Law 13.586/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Withholding income tax
|
|
|
521 |
|
|
|
(500) |
|
|
|
– |
|
|
|
17 |
|
|
|
13 |
|
|
|
(51) |
|
|
|
– |
|
Total
|
|
|
1,545 |
|
|
|
(711) |
|
|
|
(136) |
|
|
|
64 |
|
|
|
17 |
|
|
|
(171) |
|
|
|
608 |
|
Current
|
|
|
874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56 |
|
Non-current
|
|
|
671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
552 |
|
|
The following table presents the settlement years
of the outstanding amounts under these programs:
|
|
|
|
2019 |
|
|
2020 |
|
|
2021 |
|
|
2022 |
|
|
2023 |
|
|
2024
onwards |
|
|
Total |
|
PRT
|
|
|
1 |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
1 |
|
PERT
|
|
|
55 |
|
|
|
55 |
|
|
|
55 |
|
|
|
55 |
|
|
|
55 |
|
|
|
332 |
|
|
|
607 |
|
Total
|
|
|
56 |
|
|
|
55 |
|
|
|
55 |
|
|
|
55 |
|
|
|
55 |
|
|
|
332 |
|
|
|
608 |
|
21.2.1. |
Tax Settlement Program
(Programa de Regularização Tributária -
PRT)
|
The PRT enabled relief for the settlement of tax
and non-tax debts overdue
up to November 30, 2016 to the Brazilian Federal Tax
Authorities (Brazilian Federal Revenue Service and National
Treasury Attorney’s Office).
The Company joined the program to settle,
principally, proceedings at administrative level totaling
US$ 502, for which outflow of resources were probable, related
to disallowed tax credits applied for income taxes and other
Brazilian Federal taxes computation. After assessing the reliefs
provided by the PRT, the Company decided to settle it with the
benefit of using tax loss carry forwards to pay US$ 136.
The impacts of this program were accounted for in
the second quarter of 2017 within the Company’s statement of
income amounting to US$ 82 after tax effects, as shown in note
21.2.5.
21.2.2. |
Special Tax Settlement
Program (Programa Especial de Regularização
Tributária - PERT)
|
The PERT enabled relief for the settlement of tax
and non-tax debts overdue
up to April 30, 2017 to the Brazilian Federal Tax Authorities
(Brazilian Federal Revenue Service and National Treasury
Attorney’s Office), including amounts under disputes
involving these authorities.
The Company elected to join the PERT to settle the
legal proceeding, in the amount of US$ 1,977, with respect to
a notice of deficiency issued due to the use of expenses arising
from the Terms of Financial Commitment (TFC), signed by Petrobras
and Petros Plan in 2008, as deductible in determining taxable
profit. The Company decided to settle this tax dispute, by paying
US$ 1,317, which takes into account the benefits reliefs on
interests, penalties and related charges. Of this amount,
US$ 432 was settled up to December 2017, and the remaining
amount is being settled through 145 monthly installments bearing
interest from January 2018 onwards. In addition, pursuant the law
13.496 enacted on October 24, 2017, which enabled incremental
relief relating to this matter, the remaining amount was
recalculated and decreased by US$ 239.
Pursuant to the Provisional Measure 807/2017
enacted on October 31, 2017, the period to join this program
was extended from August 31 to November 14, 2017.
Therefore, the Company decided in the third quarter of 2017 to
settle other disputes relating to debts in the scope of the
Brazilian Federal Revenue Service amounting to US$ 226, After the
relief under the PERT, the total amount of these disputes was
reduced to US$ 125, of which US$ 103 was settled in January 2018
through a lump sum payment, and the remaining amount is being
settled through 141 monthly installments.
Accordingly, the Company recognized the amount of
US$ 1,839 within the statement of income in 2017, made up of
tax debts after reliefs and tax effects amounting to
US$ 1,117, reversals of deferred income tax assets for unused
tax losses from 2012 to 2017 amounting to US$ 711 and
indexation charges of US$ 22.
21.2.3. |
Non-Tax Debts Settlement Program
(Programa de Regularização de Débitos não
Tributários - PRD)
|
The PRD enabled relief for the settlement of
non-tax debts overdue to
the Brazilian Federal Agencies and similar bodies up to
October 25, 2017, including amounts under disputes and debts
in the scope of other settlement programs involving these
authorities.
The Company joined the PRD to settle some legal
proceedings involving ANP, with respect to production tax debts for
which the likelihood of losses were deemed probable, following a
court ruling in August 2017 granting to ANP its arguments. After
assessing the benefits from relief on interest, penalties and
related charges provided for by this program, the Company decided
to settle these disputes, totaling US$ 340 by paying
US$ 227 plus interest, of which US$ 136 was settled in
the fourth quarter of 2017 and the remaining amount in January
2018.
Accordingly, the Company recognized US$ 164
within the statement of income in December 31, 2017, after tax
effects, as shown in note 21.2.5.
21.2.4. |
Settlement program under
law 13.586/2017
|
As presented in note 21.4, the law 13.586 enacted
on December 28, 2017, formerly Provisional Measure 795/17,
provided for the tax treatment of several relevant issues relating
to the exploration and production of oil or natural gas. This law
also established the settlement program of withholding income tax
on remittances abroad related to charter contracts for vessels,
enabling the regularization of events occurred in the period from
2008 to 2014.
The decision to join the program was based on the
economic benefits thereof. Proceeding with the disputes would
involve financial efforts to provide significant judicial deposits
and this program gave rise to the possibility of ceasing disputes
at administrative and judicial levels related to the period from
2008 to 2013 in the amount of US$ 8,507, as well as amounts
relating to the 2014 not yet under dispute. The Company paid US$
531 in 12 consecutive installments bearing interest at SELIC rate,
of which the first was paid in January 2018.
Accordingly, the Company recognized US$ 351 within
the statement of income in December 31, 2017, after tax
effects, as shown in note 21.2.5.
21.2.5. |
Impacts of the tax
settlement programs within statement of income of
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRT |
|
|
PERT |
|
|
PRD |
|
|
Law
13,586/17
|
|
|
Total |
|
Cost of sales
|
|
|
– |
|
|
|
– |
|
|
|
(131) |
|
|
|
– |
|
|
|
(131) |
|
Other taxes
|
|
|
(169) |
|
|
|
(366) |
|
|
|
(25) |
|
|
|
(323) |
|
|
|
(883) |
|
Finance expenses
|
|
|
(249) |
|
|
|
(309) |
|
|
|
(71) |
|
|
|
(208) |
|
|
|
(837) |
|
Income taxes - notice of deficiency
|
|
|
(98) |
|
|
|
(565) |
|
|
|
– |
|
|
|
– |
|
|
|
(663) |
|
Total - after reliefs
|
|
|
(516) |
|
|
|
(1,240) |
|
|
|
(227) |
|
|
|
(531) |
|
|
|
(2,514) |
|
Impacts of PIS/COFINS on settlement programs
|
|
|
– |
|
|
|
(69) |
|
|
|
(7) |
|
|
|
– |
|
|
|
(76) |
|
Income taxes - deductible expenses
|
|
|
(51) |
|
|
|
192 |
|
|
|
70 |
|
|
|
180 |
|
|
|
391 |
|
Other income and expenses - reversal of provision
|
|
|
485 |
|
|
|
11 |
|
|
|
– |
|
|
|
– |
|
|
|
496 |
|
Total
|
|
|
(82) |
|
|
|
(1,106) |
|
|
|
(164) |
|
|
|
(351) |
|
|
|
(1,703) |
|
Income taxes - reversal of unused tax losses from 2012 to 2017
|
|
|
– |
|
|
|
(711) |
|
|
|
– |
|
|
|
– |
|
|
|
(711) |
|
Impacts within the statement of income (before Indexation
charges)
|
|
|
(82) |
|
|
|
(1,817) |
|
|
|
(164) |
|
|
|
(351) |
|
|
|
(2,414) |
|
Indexation charges
|
|
|
– |
|
|
|
(22) |
|
|
|
– |
|
|
|
– |
|
|
|
(22) |
|
Impacts within the statement of income
|
|
|
(82) |
|
|
|
(1,839) |
|
|
|
(164) |
|
|
|
(351) |
|
|
|
(2,436) |
|
21.3. |
Tax amnesty programs
– State Tax (Programas de Anistias Estaduais)
|
In accordance with its current corporate governance
process and following cost-benefit analysis, the Company elected,
during the year ended December 31, 2018, to settle in cash VAT
(ICMS) tax disputes by joining states amnesty settlement programs
and taking advance of their reliefs, as shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State |
|
State
Law/Decree n°
|
|
Benefits received |
|
Disputes |
|
|
Reduction
Benefit
|
|
|
Amount to
be paid
after
benefit (*)
|
|
|
|
|
|
|
|
TO
|
|
3.346/18 |
|
Reduction of 90% of debts from fines
and interest. |
|
|
5 |
|
|
|
(3) |
|
|
|
2 |
|
|
|
|
|
|
|
RN
|
|
27.679/18 and 10.341/18 |
|
Reduction of 95% of fines, 80% of
the interest and 50% of Vat tax forgiveness |
|
|
205 |
|
|
|
(175) |
|
|
|
30 |
|
|
|
|
|
|
|
SE
|
|
8.458/18 |
|
Reduction of 90% of fines and
interest |
|
|
252 |
|
|
|
(219) |
|
|
|
33 |
|
|
|
|
|
|
|
MT
|
|
10.433/16 and 1.630/18 |
|
Reduction of 75% of interest, fines
and penalties. |
|
|
104 |
|
|
|
(48) |
|
|
|
56 |
|
|
|
|
|
|
|
BA
|
|
14.016/18 |
|
Reduction of 90% of fines and
interest |
|
|
269 |
|
|
|
(199) |
|
|
|
70 |
|
|
|
|
|
|
|
RJ
|
|
182/18 |
|
Reduction of 50% of interest and 70%
or 85% of the fines related to ICMS, with the respective
charges. |
|
|
376 |
|
|
|
(185) |
|
|
|
191 |
|
|
|
|
|
|
|
RS
|
|
54.346/2018 |
|
Reduction of up to 85% and 40% over
fines and interest, respectvely. |
|
|
1 |
|
|
|
– |
|
|
|
1 |
|
|
|
|
|
|
|
|
1,212 |
|
|
|
(829) |
|
|
|
383 |
|
|
(*) Amounts recognized in other taxes (US$ 289) and
financial expenses (US$ 94).
|
|
21.4. |
New Taxation Model for the
Oil and Gas Industry
|
On December 28, 2017, the Brazilian Federal
Government enacted Law No. 13,586, which outlines a new
taxation model for the oil and gas industry and, along with the
Decree 9,128/2017, establishes a new special regime for
exploration, development and production of oil, gas and other
liquid hydrocarbons named Repetro-Sped.
Due to the application of this new regime, the
Company expects greater legal stability in the oil and gas industry
in Brazil, which may encourage higher investments and reduce the
number of litigations involving the industry players.
Regarding the Repetro-Sped, this regime provides
for the continuation of total tax relief over goods imported with
temporary permanence in Brazil, as previously governed by the
former Repetro (Special Customs Regime for the Export and Import of
Goods designated to Exploration and Production of Oil and Natural
Gas Reserves), and adds this relief to goods permanently held in
Brazil. Accordingly, the absence of the need to return such goods
to foreign countries eliminates future cost of removal. This
benefit made possible the migration of all the goods acquired in
the former REPETRO to the REPETRO-Sped, with lower operating and
financial costs. Since 2018, the Company has transferred the
ownership of oil and gas assets under this regime from foreign
subsidiaries to the parent company in Brazil and intends to finish
this process until 2020. The regime will expire in December,
2040.
Following the creation of Repetro-Sped, the
Brazilian states, pursuant to a decision of the Brazilian National
Council of Finance Policies (CONFAZ), agreed to grant tax
incentives relating to VAT (ICMS) over transactions in the scope of
this regime to the extent each state enacts its specific regulation
providing for the tax relief for the oil and gas industry.
At the date of issuance of these financial
statements, the states enacting new regulations governing the VAT
tax incentives authorized by CONFAZ were: Amazonas, Bahia,
Ceará, Espirito Santo, Rio de Janeiro, Rio Grande do Norte,
São Paulo, Sergipe, Minas Gerais and Piauí.
21.5. |
Deferred income taxes -
non-current
|
a) |
The changes in the deferred income taxes are
presented as follows:
|
Income taxes in Brazil comprise corporate income
tax (IRPJ) and social contribution on net income (CSLL). Brazilian
statutory corporate tax rates are 25% and 9%, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant and
Equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration
and
decommissioning
costs
|
|
|
Others (*) |
|
|
Loans, trade
and other
receivables /
payables
and financing
|
|
|
Finance leases |
|
|
Provision for
legal
proceedings |
|
|
Tax losses |
|
|
Inventories |
|
|
Employee
Benefits |
|
|
Others |
|
|
Total |
|
Balance at January 1, 2017
|
|
|
(11,205) |
|
|
|
937 |
|
|
|
3,512 |
|
|
|
(90) |
|
|
|
1,128 |
|
|
|
6,040 |
|
|
|
429 |
|
|
|
3,009 |
|
|
|
284 |
|
|
|
4,044 |
|
Recognized in the statement of income for the year
|
|
|
363 |
|
|
|
(1,292) |
|
|
|
(1,099) |
|
|
|
(64) |
|
|
|
1,134 |
|
|
|
278 |
|
|
|
130 |
|
|
|
(4) |
|
|
|
139 |
|
|
|
(415) |
|
Recognized in shareholders’ equity (**)
|
|
|
- |
|
|
|
- |
|
|
|
(887) |
|
|
|
- |
|
|
|
- |
|
|
|
(69) |
|
|
|
- |
|
|
|
(273) |
|
|
|
9 |
|
|
|
(1,220) |
|
Cumulative translation adjustment
|
|
|
150 |
|
|
|
45 |
|
|
|
34 |
|
|
|
4 |
|
|
|
(40) |
|
|
|
(67) |
|
|
|
(6) |
|
|
|
(34) |
|
|
|
(11) |
|
|
|
75 |
|
Use of tax credits
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(271) |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(271) |
|
Others
|
|
|
- |
|
|
|
(188) |
|
|
|
(16) |
|
|
|
20 |
|
|
|
(21) |
|
|
|
120 |
|
|
|
16 |
|
|
|
(10) |
|
|
|
108 |
|
|
|
29 |
|
Balance at December 31, 2017
|
|
|
(10,692) |
|
|
|
(498) |
|
|
|
1,544 |
|
|
|
(130) |
|
|
|
2,201 |
|
|
|
6,031 |
|
|
|
569 |
|
|
|
2,688 |
|
|
|
529 |
|
|
|
2,242 |
|
Initial application of IFRS 9
|
|
|
- |
|
|
|
- |
|
|
|
117 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5 |
|
|
|
122 |
|
Balance at January 1, 2018
|
|
|
(10,692) |
|
|
|
(498) |
|
|
|
1,661 |
|
|
|
(130) |
|
|
|
2,201 |
|
|
|
6,031 |
|
|
|
569 |
|
|
|
2,688 |
|
|
|
534 |
|
|
|
2,364 |
|
Recognized in the statement of income for the period
|
|
|
2,048 |
|
|
|
(1,109) |
|
|
|
(1,509) |
|
|
|
(134) |
|
|
|
208 |
|
|
|
(244) |
|
|
|
(49) |
|
|
|
192 |
|
|
|
(167) |
|
|
|
(764) |
|
Recognized in shareholders’ equity (**)
|
|
|
- |
|
|
|
- |
|
|
|
1,916 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(119) |
|
|
|
2 |
|
|
|
1,799 |
|
Cumulative translation adjustment
|
|
|
1,397 |
|
|
|
205 |
|
|
|
(260) |
|
|
|
28 |
|
|
|
(345) |
|
|
|
(668) |
|
|
|
(65) |
|
|
|
(417) |
|
|
|
(34) |
|
|
|
(159) |
|
Use of tax credits
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,117) |
|
|
|
- |
|
|
|
- |
|
|
|
(105) |
|
|
|
(1,222) |
|
Others
|
|
|
- |
|
|
|
(26) |
|
|
|
18 |
|
|
|
89 |
|
|
|
2 |
|
|
|
15 |
|
|
|
- |
|
|
|
11 |
|
|
|
(101) |
|
|
|
8 |
|
Balance at December 31, 2018
|
|
|
(7,247) |
|
|
|
(1,428) |
|
|
|
1,826 |
|
|
|
(147) |
|
|
|
2,066 |
|
|
|
4,017 |
|
|
|
455 |
|
|
|
2,355 |
|
|
|
129 |
|
|
|
2,026 |
|
Deferred tax assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,438 |
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,196) |
|
Balance at December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,242 |
|
Deferred tax assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,680 |
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(654) |
|
Balance at December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,026 |
|
(*) It mainly includes impairment adjustments and
capitalized borrowing costs.
(**) The amounts presented as Loans, trade and
other receivables/payables and financing relate to the tax effect
on exchange rate variation recognized within other comprehensive
income (cash flow hedge accounting) as set out in note 34.2.
The Company recognizes the deferred tax assets
based on assessment of uncertainty over income tax treatments in
the context of applicable tax laws, as well as projections of
future taxable profits in a ten-year perspective supported by the
Business and Management Plan, which is revised annually.
b) |
Timing of reversal of deferred income
taxes
|
Deferred tax assets were recognized based on
projections of taxable profit in future periods supported by the
Company’s 2019-2023 Business and Management Plan (BMP). The
main goals and objectives outlined in its business plan include
business restructuring, a divestment plan, demobilization of assets
and reducing operating expenses.
Management considers that the deferred tax assets
will be realized to the extent the deferred tax liabilities are
reversed and expected taxable events occur based on its 2019-2023
BMP.
The estimated schedule of recovery/reversal of net
deferred tax assets (liabilities) recoverable (payable) as of
December 31, 2018 is set out in the following table:
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
Liabilities |
|
2019
|
|
|
268 |
|
|
|
(89) |
|
2020
|
|
|
386 |
|
|
|
(63) |
|
2021
|
|
|
464 |
|
|
|
(21) |
|
2022
|
|
|
495 |
|
|
|
27 |
|
2023
|
|
|
521 |
|
|
|
322 |
|
2024 and thereafter
|
|
|
546 |
|
|
|
478 |
|
Recognized deferred tax assets
|
|
|
2,680 |
|
|
|
654 |
|
Brazil
|
|
|
3 |
|
|
|
- |
|
Abroad
|
|
|
1,472 |
|
|
|
- |
|
Unrecognized deferred tax assets
|
|
|
1,475 |
|
|
|
- |
|
Total
|
|
|
4,155 |
|
|
|
654 |
|
At December 31, 2018, the Company had tax loss
carryforwards arising from offshore subsidiaries, for which no
deferred tax assets had been recognized. These tax losses totaling
US$1,472 (US$ 2,660 as of December 31, 2017) arose mainly from
oil and gas exploration and production and refining activities in
the United States of US$1,398 (US$ 2,370 as of
December 31, 2017), as well as activities in Spain in the
amount of US$69 (US$ 290 as December 31, 2017).
An aging of the unrecognized tax carryforwards,
from companies abroad is set out below:
|
|
|
|
|
|
|
Unrecognized
deferred tax
assets |
|
2020
|
|
|
14 |
|
2021
|
|
|
36 |
|
2022
|
|
|
1 |
|
2023
|
|
|
13 |
|
2024
|
|
|
9 |
|
2025
|
|
|
4 |
|
2026
|
|
|
68 |
|
2027
|
|
|
78 |
|
2028
|
|
|
88 |
|
2029
|
|
|
97 |
|
2030 and thereafter
|
|
|
1,064 |
|
Total
|
|
|
1,472 |
|
21.6. |
Reconciliation between
statutory tax rate and effective tax expense rate
|
The following table provides the reconciliation of
Brazilian statutory tax rate to the Company’s effective rate
on income before income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassified |
|
|
|
2018 |
|
|
2017 |
|
|
2016 |
|
Net income before income taxes
|
|
|
10,827 |
|
|
|
1,507 |
|
|
|
(3,493) |
|
Nominal income taxes computed based on Brazilian statutory
corporate tax rates (34%)
|
|
|
(3,681) |
|
|
|
(513) |
|
|
|
1,079 |
|
· Tax benefits from the deduction of
interest on capital distribution (*)
|
|
|
553 |
|
|
|
(53) |
|
|
|
(83) |
|
· Different jurisdictional tax rates
for companies abroad
|
|
|
355 |
|
|
|
669 |
|
|
|
(157) |
|
. Brazilian income taxes on income of
companies incorporated outside Brazil (**)
|
|
|
(41) |
|
|
|
(70) |
|
|
|
(319) |
|
|
|
|
|
· Tax incentives
|
|
|
74 |
|
|
|
168 |
|
|
|
46 |
|
· Tax loss carryforwards (unrecognized
tax losses)
|
|
|
(484) |
|
|
|
(146) |
|
|
|
(265) |
|
· Non-taxable
income (non-deductible
expenses), net (***)
|
|
|
(780) |
|
|
|
(454) |
|
|
|
(856) |
|
· Tax settlement programs (****)
|
|
|
- |
|
|
|
(1,373) |
|
|
|
- |
|
· Agreement with US authorities
|
|
|
(293) |
|
|
|
- |
|
|
|
- |
|
· Others
|
|
|
41 |
|
|
|
75 |
|
|
|
(220) |
|
Income taxes expense
|
|
|
(4,256) |
|
|
|
(1,697) |
|
|
|
(775) |
|
Deferred income taxes
|
|
|
(370) |
|
|
|
(400) |
|
|
|
906 |
|
Current income taxes
|
|
|
(3,886) |
|
|
|
(1,297) |
|
|
|
(1,681) |
|
Total
|
|
|
(4,256) |
|
|
|
(1,697) |
|
|
|
(775) |
|
|
|
|
|
Effective tax rate of income taxes
|
|
|
39.3% |
|
|
|
112.6% |
|
|
|
(22.2%) |
|
(*) It includes amounts received from non-consolidated companies, as well as
paid to non-controlling
interests.
(**) It relates to Brazilian income taxes on
earnings of offshore investees, as established by Law
No. 12,973/2014.
(***) It includes results in equity-accounted
investments and expenses relating to health care plan.
(****) Income taxes in the scope of PRT and PERT
and reversals of losses carry forwards from 2012 to 2017.