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    Brazil amends vessel importation tax

    News // September 4, 2014

    Legislation in Brazil regarding temporary importation taxes for any foreign-flagged vessel has been amended via Normative Instruction No. 1488/2014.

    According to broker Seabrokers, owners of any vessel working on a long-term basis
    offshore Brazil can apply for REPETRO, which effectively suspends all taxes for the vessel during the term of that contract.

    However, upon the conclusion of the charter, or in the absence of a long-term contract, a foreign-flagged vessel’s owners must pay a temporary importation tax to keep the unit in Brazil while they try to secure a new term charter or perform some
    spot jobs.

    This tax would be 1 per cent of a suspended importation tax, which varies between 50-60 per cent of the vessel’s value.

    To simplify, this temporary importation tax roughly equates to 0.5 per cent of the
    vessel’s value per month.

    Previously, this temporary importation tax was paid on a monthly basis. However, the
    change to the legislation now stipulates that six months of this tax must be paid up front, making it very difficult, and potentially costly, for an owner to keep a foreign-flagged vessel in Brazil while they attempt to secure a new term charter or perform some spot jobs.

    "On the flip-side," said Seabrokers, "this could increase the opportunities available for a Brazilian-flagged vessel or those in REB (foreign vessel under Brazilian flag using
    Brazilian tonnage), helping to protect the domestic market and domestic tonnage."

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