Brazil upstream fiscal summary
Brazil's upstream industry is primarily licensed with a complex concession fiscal regime. From October 2013, profit sharing contracts (PSC) are used for pre-salt developments and other strategic areas. Licences are awarded in regular rounds. Concession terms primarily include a 10% royalty, special participation tax that varies with time, location and production between 10% and 40%, and a 34% corporate income tax. PSC terms mainly include a 15% royalty, 80% cost recovery ceiling, and a biddable government profit share. The latter is adjusted based on a price and production combination. Corporate income tax applies similar to concessions. A key issue in Brazil is the complex range of indirect taxes in both regimes at the federal, state and local levels. These taxes add approximately 15% to 20% to project investments and costs.