UPDATE 2-Petrobras to take $576 mln Q3 charge for back taxes

viernes 14 de agosto de 2015 13:59 GYT

(Recasts to focus on third-quarter charge, adds details of tax provisions)

SAO PAULO Aug 14 (Reuters) - State-run oil company Petroleo Brasileiro SA said it will take a 2 billion reais ($576 million) charge against third-quarter earnings to pay a disputed tax bill with Brazil's federal government, its second unexpected tax charge in a month.

The charge is related to 6 billion reais of disputed tax assessments over eight years between 1999 and 2012, Petrobras, as the company is known, said on Friday in a statement.

Under terms of the plan, Petrobras, will have the assessment cut by half and use tax credits to pay 876 million reais of the remaining 3 billion-reais bill. The company will also use 1.26 billion reais from a judicial cash escrow account to cover the tax obligation.

The rest will be paid in installments through 2017.

The plan comes as Petrobras tries to improve corporate governance practices, an effort that Chief Executive Alder Bendine said earlier this month will include revamping the way the company accounts for tax liabilities.

At the end of the second quarter, Petrobras had set aside 343 only million reais against a potential 97 billion reais in future tax charges, a provision of 0.3 percent. That is low compared with other large Brazilian companies.

Vale, the Brazilian mining company, has lower revenue and lower debt than Petrobras and is facing many of the same tax disputes, but has provision levels nearly 10 times greater than Petrobras. As of June 30, Vale had provisioned 1 billion reais against 34.1 billion reais of potential tax liabilities, or nearly 3 percent of the total.

The latest Petrobras tax write-off may raise expectations that the company will speed resolution of other tax matters and set provisions for other liabilities.   Continuación...