Petrobras Updates on Tax Contingency

(Petrobras,  17.Jul.2015) – Due to the unfavorable final ruling by the Tax Appeals Board (CARF), Petrobras paid R$1.6 bln to cover the Tax Deficiency Notice issued by the Brazilian Federal Revenue Service, R$1.2 bln in cash and R$0.4 bln in tax losses.

The Tax Deficiency Notice relates to Financial Operations Tax (IOF) on loans made by the company to its overseas subsidiaries in 2008. The discussion began in 2012 and over time the probative-evidentiary context proved to be unfavorable to the position defended by the company.

Consequently, appealing the decision in court would involve the constitution of a guarantee, as well as a substantial increase in the amount of the debt over time due to interest and additional financial charges.

It is important to note that if the payment were not made, in addition to the above impacts, the debt would be registered as delinquent, which would prevent the renewal of the Federal Tax Clearance Certificate or even result in its cancellation, which could substantially jeopardize the company, for example, by preventing it from importing and exporting oil and oil products.

This payment will be recognized in the financial statements for the 2Q:15, with a negative impact of R$1.4 bln, net of taxes.

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