number 10 dutcham magazine magazine 3 3 hans mulder [email protected] marina fujihara...

DUTCHAM MAGAZINE

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june 2016 number 10

dutchamdutcham magazinemagazine

Mammoet’s Moving modules Mammoet’s Moving modules

for Brazilian oilfor Brazilian oil

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DUTCHAM MAGAZINE

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The Dutch Brazilian Chamber of Commerce is a non-profit

Association in accordance to Brazilian laws, founded in 1952,

with the objective to promote and assist trade and investments

between Brazil and the Netherlands, committed to the concept

of open and competetive market economies, respecting social

and environmental sustainability.

To reach such objectives, the Chamber develops

"networking" initiatives, produces publications, organizes

events, and provides services to collective and individual com-

panies, maintaining good relationships with governmental enti-

ties, industrial- and trade organizations as well as other organi-

zations, in both countries.

It self-sustains its organization with membership contribu-

tions, sponsorships and reimbursements of expenses.

Its board of directors is composed of executives who repre-

sent important parties in the bilateral commercial relationship

between Brazil and the Netherlands, regardless of their origin

or nationality.

Its greatest added value is in the strategic, administrative,

legal, fiscal and practical assistance in all other fields to struc-

ture business, whereto it counts on many specialized service

suppliers among its member companies.

For further information, see www.dutcham.com.br

Dutch Brazilian

Chamber of

Commerce

Visits by appointment only

Rua Marquês de Itu, 503 6o andar cj. 62

01223-001 | São Paulo - SP | Brazil

Phone: (+55) 11 3221 5899

E-mail: [email protected]

Rua da Candelária, 09 | Sala 1101

20091-904 | Rio de Janeiro - RJ | Brazil

Phone: (+55) 21 99154 5071


BRADUTCH

Delflandlaan 1, 1062 EA

Amsterdam — Netherlands

Phone: (+31) 020 223 2686


Rio de Janeiro Branch Office Dutch Representative Office Head Office

www.linkedin.com/in/dutchambrazil

www.facebook.com.br/dutchambrazil

www.dutcham.com.br

Articles

New Members

Agenda

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Hans Mulder [email protected]

Marina Fujihara [email protected]

Trainee Journalist/ Art Design Managing Director/ Editor

Articles

New Members

Agenda

DUTCHAM website redesigned MACHADO ASSOCIADOS: Information about the final beneficiary in the CNPJ SANTANDER: Headwinds, tailwinds and wind of change MAMMOET delivers full logistics scope for FPSO module integration project KPMG: Oil & Gas industry updates UNILEVER strategies for sustainability

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Rede Digital

Loyens & Loeff N.V.

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DUTCHAM BUSINESS BORREL

Oil and Gas Committee invite to Breakfast

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Hans Mulder

Managing Director Magazine Editor

Pollyana dos Reis

Dutch Representative Office

Victor Schroeder

Management Assistant

Irani Celestino

Management Assistant

Maarten de Haan

Executive Manager

Rio Branch

Marina Fujihara

Trainee Journalist

Magazine Art Designer

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Dutcham Website Redesigned

Teaming up with the company “Rede Digital”, the Dutcham’s website got a

complete redesign. It aims to be cleaner, more organized and more user frien-

dly. With simplified menus, the navigation on the website should be easier and

more instinctive to use.

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1. Normative Instruction 1634 (“IN 1634/2016”) was published on May 9,

2016, and in it the Brazilian Federal Revenue Service brought several

changes to the Brazilian Corporate Taxpayers’ Register (CNPJ) and

revoked Normative Instruction 1470/2014 and its subsequent amend-

ments, which previously addressed the subject. IN 1634/2016 will be-

come effective on June 1, 2016.

2. The main innovation brought by IN 1634/2016 is the requirement to

identify the final beneficiary in the enrollment of entities that must ha-

ve a CNPJ, so that the ownership chain is informed up to the individu-

als characterized as final beneficiaries, when applicable.

3. In general, IN 1634/2016 defines as final beneficiary the individual

who, ultimately, directly or indirectly, owns, controls or significantly

influences an entity, or the individual on whose behalf a transaction is

conducted.

4. IN 1634/2016 establishes that such significant influence occurs when

the individual, directly or indirectly, holds more than 25% of the enti-

ty’s corporate capital, or has preponderance in the corporate resoluti-

ons and the power to elect the majority of the entity's administrators.

5. The entities that have to inform their final beneficiary, when applica-

ble, are companies, investment clubs and funds, non-resident inves-

tors who have certain assets and/or rights in Brazil (real estate, vehi-

cles, vessels, aircraft, bank accounts, investments in the financial and

capital markets, equity interest) or who carry out certain transactions

in Brazil (leasing, chartering of vessels, equipment rental, lease, and

import of goods for capital contribution in Brazilian companies), fo-

reign banking institutions carrying out transactions for the purchase

and sale of foreign currency with banks in Brazil, receiving and delive-

ring foreign currency in cash, and silent partnerships.

Normative instruction 1634/2016: Information about

the final beneficiary in the CNPJ

LEGAL LETTER/MAY 2016 - By Renata Almeida Pisaneschi / Paloma Yumi de Oliveira.

Renata Almeida Pisaneschi and Paloma Yumi de Oliveira are, respectively, partner and lawyer of the Corporate/

Contracts area of Machado Associado.

Brought to you by Machado Associados:

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6. Publicly-held corporations in Brazil or in countries where public disclo-

sure of relevant shareholders is mandatory and that do not qualify as

tax havens or jurisdictions subject to privileged tax regime do not have

to provide information about their final beneficiary.

7. The obligation to inform the final beneficiary and deliver the documents

defined in IN 1634/2016 begins on January 1, 2017, to entities that en-

roll in the CNPJ as of such date. For entities enrolled in the CNPJ be-

fore January 1, 2017, the obligation begins when they, as from the sa-

me date, inform any change to the enrollment. The deadline of Decem-

ber 31, 2018 applies to the latter case.

8. Failure by the foreign investors to comply with the obligation to inform

and present documents to the Brazilian Federal Revenue Service

will result in the suspension of the CNPJ enrollment and the impe-

diment to negotiate with banks, including as regards the handling of

bank accounts, carrying out investments, and obtaining loans.

9. In order to simplify the procedures, IN 1634/2016 increased the

number of units that implement the procedures for enrollment, mo-

dification and cancellation of the CNPJ, by means of the entities

that are part of the REDESIM (National Network for Simplification

of Registration and Legalization of Companies and Businesses).

Moreover, it regulated the transmission of digital documents for

compliance with the obligations of entities as from January 1, 2017.

10. Additionally, IN 1634/2016 provided for the inclusion of the Legal Entity

Identifier (“LEI”) in the CNPJ enrollment of entities that already have

such identifier. The LEI is an international code that allows accurately

identifying entities that are parties to financial transactions, including

entities that do not typify as financial institutions, and often contains in

its database information about their final beneficiary.

11. In conclusion, as disclosed, the Brazilian Federal Revenue Service is

acting to address international concerns regarding the complete identi-

fication of the entities aiming at preventing tax evasion, money launde-

ring, and corruption. Entities must be prepared as of January 1, 2017,

to comply with the new obligations to inform provided for by IN

1634/2016.

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As a large emerging economy with mostly commo-dity-based exports, Brazil has been facing headwinds coming from the north: both the outlook for higher inte-rest rates in the US and the prospect of slower growth in China are detrimental of the country’s ability to raise ex-ternal funds, and as such were conducive of some cur-rency weakening. Such development was part of a bro-ader transition in economic terms, which also encom-passed the correction of some important prices – gasoli-ne, electricity and interest rates, mainly – that had been misaligned for a while due to policy-sponsored subsidi-es.

As a result, the country has undergone a forced, but welcome, transition to a consumption level more compatible to the country’s capacity to produce and compete, and therefore with conditions to resume a mo-re balanced growth. Although such process has not been concluded yet, there are some incipient signals su-ggesting that we may be about to leave behind the un-comfortable combination of recession and high inflation. Indeed, we believe that more favorable credit conditions and some recovery in business confidence will support a positive, yet modest, expansion of the economy in 2017 (2%). Meanwhile, we expect inflation to gradually decli-ne from the current 9.3% y/y to 7% at the end of this year and 5.2% at end -2017. Such deceleration, in combination with the disinflationary effects of a tighter fiscal policy, should pave the way for a sizeable monetary easing in the quarters ahead: we see the target overnight rate declining from the current 14.25%pa to 12.75% pa at end -2016 and 10% pa at end-2017.

There is homework to be done though, mainly on the fiscal side: the country ne-eds to propose and approve reforms (social security, tax, limits to spending etc) aimed at improving medium- to long-term fiscal performance, reversing budget deficits (currently running at 2% of GDP) and securing a sustainable trend for the public debt, after the surge seen in recent years.

Despite the current crisis, the country remains as one of the most attractive emer-ging markets, for its market size, its demography and its institutions, which continue to represent strong tailwinds. Also, Brazil stands out as an emerging economy where odds of a financial meltdown are minimal, thanks to the high level of international re-serves (which exceed the whole outstanding external debt) and the tight regulation of the banking system. However, firms need to navigate the difficulties, mainly regarding productivity, taxes and infrastructure, particularly while those difficulties are not addressed by a broader set of reforms. Such complex background brings opportunities to sectors that benefit from competitiveness gains and for firms that choose adequate strategies face to those challenges.

Headwinds, tailwinds and wind of change

Adriana Dupita

Economist at Santander

Brought to you by Santander:

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The end client, TUPI BV, is a consortium composed of Petrobras Netherlands BV (PNBV, 65%), the British Gas Group (BG Group, 25%) and Galp Energia S.A. (10%), working on the ongoing development of the Lula Alto field, located in the Santos Basin, Brazil.

Working towards a tight deadline with the P66 nearing completion, the client was looking for a reliable partner to install the last 4 modules. The modules range in weight from slightly over 1,000 to 1,425 metric tons. They were built by BJCHI in Sattahip, Thailand and ship-ped by module carrier to Brazil for integra-tion onto the hull of the FPSO. Another shipment is planned for the beginning of Au-gust 2016.

The load-out was the result of close coopera-tion between BJCHI and Mammoet Thailand. BJCHI provides manufacturing and installa-tion services for its customers’ industrial plants. Building and delivering FPSO modules is a move into new territory for BJCHI, which is venturing into the oil and gas market for the first time.

Mammoet delivers full logistics scope for FPSO module

integration project

Mammoet’s combination of experience, engine-ering and equipment provided a complete transport solution for this challenging project. Mammoet managed the total logistics operation including chartering the module carrier MV Me-ga Trust to ship the modules to Brazil, comple-te naval engineering, weighing the modules and a load-out at the fabrication yard in Satta-hip, Thailand using 60 axle lines of SPMT.

Reinder de Haan, Commercial Manager Logis-tics Sales Mammoet: “The key success of this project is the close working relationship between Mammoet and our clients. Mammoet used its engineering skills and network of su-ppliers and carriers to ensure a flawless load-out and keep to the strict deadlines.”

Seongjin Lee, project manager at BJC: “This project was very challenging from every aspect. Nothing was on our side in terms of the short project period, rare materials and long lead ti-mes. However, with good support from all BJCHI’s sub-contractors, vendors and emplo-yees, as a team we finally made the load-out. I would like to use this opportunity to thank Mammoet and all other personnel, who partici-pated in this job.”

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The barrel low price has a negative impact on production, which

requires high-cost operations; however, this scenario is likely to

improve and investments tend to resume

Oil & Gas industry

updates

In colaboration with Mr. Anderson Dutra

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Both economic instability and significant cutbacks in Petrobras’ investment forecasts, which culmina-ted in a broad revision of the contracts entered into with leading construction companies and equi-pment suppliers in Brazil, are some of the signifi-cant challenges that the Oil & Gas industry has to weather. In addition, another challenge posed to the industry is the price of crude oil barrel, which casts doubts on the pre-salt economic feasibility, as the production relies largely on high-cost deep wa-ter operations. Despite the fact that short-term investment pers-pectives are limited as a result of this scenario, in-dustry experts believe in the market recovery, even if such recovery occurs slowly, on account of exis-ting installed capacity of key industries and the country's own natural resources potential. "It is im-portant to bear in mind the number of pre-salt re-servoirs located within Brazil and certified by inter-national bodies. Additionally, the country already has the whole supply chain installed in its territory and it relies on the legal stability that protects con-cession agreements. Nationalization, terrorist acti-vity or war risks that could spook investors are con-sidered very low", says Anderson Dutra, Head of Oil & Gas Industry at KPMG in Brazil.

This guide is updated on a regu-lar basis in accordance with the tax requirements impacting the Oil & Gas industry chain.Dutra believes that two measures re-cently taken by the government can favor the resumption of in-vestments. One of them is sena-tor José Serra’s bill, which should go through vote still this semes-ter. This bill aims at terminating Petrobras' monopoly as the only pre-salt operator. This change would create opportunities for companies which have already participated in operations with Pe-trobras to further develop their activities in these reservoirs, thus enabling the former to win new partners and increase inves-

tments. The second measure taken is the flexibility of the rule concerning local content in the oil and gas chain. As a result of the barrel low price, government sig-ned in January a decree aimed at amending the policy for local content and assisting oil companies in meeting goals regarding the acquisition of goods

This guide is upda-

ted on a regular

basis in accordan-

ce with the tax re-

quirements impac-

ting the Oil & Gas

industry chain.

Taxes

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and services in the domestic market. "These two measures may boost the Brazilian Oil & Gas industry and investors' confidence”, he points out.

Practical measures KPMG’s industry Head stresses the vigorous process of corporate governance improve-ments taking place in companies' structures, in tandem with economic and political aspects that promote changes in the sector, thus provi-ding the ones who invest in the country with a more favorable environment. "We are having hard times right now, but we are beginning to see the light at the end of the tunnel, and that is how we have been working with the indus-try", he says. This improvement is also contin-gent upon the efforts made by the companies to comply with the country's tax aspects, which are complex and undergo constant transfor-mation. Last year, for example, was

Taxes marked by the end of the Transition Tax Regi-me (Regime Transitório de Tributação - RTT), which granted companies tax neutrality for the period during they were adapting to the Inter-national Accounting Standards. As a result of the new rules in legislation that lead to a number of adjustments in tax deter-mination, KPMG releases the third edition of "A Guide to Brazilian Oil & Gas Taxation". This publication includes a description of the main taxes levied on the industry chain with the la-test tax updates in the country. One of them addresses the change in taxation of income earned abroad. "An important particularity for the industry is the fact that companies with in-come earned abroad deriving from time or bareboat charter activities, operating lease, rent, asset loan or service directly related to the oil and gas prospecting and exploration, within the Brazilian territory, do not submit the income earned here in Brazil to taxation, sta-tes Julio Cepeda, Tax Partner at KPMG in Brazil. The other change presented in the Guide is an additional measure impacting capital gains ta-xation. "A priori, this measure affects only Bra-zilian individuals; however, due to a technical matter, non-residents who currently make cer-tain investments in Brazil may also be affected by such tax", explains Cepeda.

The publication also addresses eSocial (Sped), which basically consists of replacing physical bookkeeping with digital accounting bookkeeping. This guide is aimed at foreigner investors who intend to invest in the whole in-dustry chain. This is why this publication also informs how the current

legislation works. It also mentions the signifi-cance of the local content rules for companies that participate in the bidding rounds, as well as the general provisions for transactions per-formed in the country. According to Cepeda, in addition to the as-pects addressed in the guide, it is worth highlighting the fact that the market players stay alert to changes that may affect the indus-try in the near future; taking account of the usual and constant changing scenario to which Brazilian tax system subject. KPMG's Tax partner also alerts to the possible impacts arising from the Declaratory Act sig-ned by the government, which grants the sta-tus of privileged tax regime to the Netherlands, taking into account that many players opera-ting in the industry hold companies located in such country. “The Netherlands have always been a very attractive country for investments due to its historical agreements entered into with other countries, both from the legal and tax perspectives, and to its already installed infrastructure, which ranges from its location within Central Europe, to its impeccable trans-portation logistics and easy adaptability, as the majority of its population masters the English language. Not to mention the country's educa-tional system, which attracts various expatria-tes and their families. This change in status may prejudice some structures that have been ensuring an interesting return on investments made in the industry", adds Dutra, who worked for two years at KPMG's office in the Nether-lands.

For a better visualization of the latest measu-res and possible changes that may occur, as well as the emergency implementation status of each one of them, check out the following infographic.

Implementation status

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IN PROGRESS

* Taxation on capital gains

Pages 8 and 9 of the Guide

eSocial (Sped)

Page 45 of the Guide

ALREADY A REALITY

RTT

of the Guide

Income taxation abroad

Pages 35 and 36 of the Guide

Goodwill


The Netherlands’ reclassifi-

cation

Not yet included in the Guide

FULL ALERT TO FUTURE

CHANGES

Repetro (Special Customs

Regime aimed at the Rese-

arch and Exploration of Oil

and Natural Gas deposits)


PIS/COFINS Unification Not yet included in the Guide

CPMF Not yet included in the Guide

Regulation

Implementation status 4

*Law 13259 has already been published; however, the date it will be in force is still being discussed.

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On Thursday June the 9th, UNILEVER presented its yearly Sustainability Plan in the auditorium of

the MASP Museum in São Paulo. Whereas its attention for the environment was already well

known, a special focus was this year given to social inclusion and the improvement of the well-

being of human beings, especially by the promotion of equality to the working women in society.

That all the actions towards improved sustainability in the widest sense are also good for busi-

ness was explained by Unilever´s head of Corporate Affairs – Communications & Sustainable

Business, Mr. Antonio Calcagnotto, who illustrated that with numbers showing improved growth,

reputation, and reduced risks and costs for the company.

Unilever strategies for Sustainability

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Rede Digital is a company specialized in digital marketing (Website development, Search Engine Op-timization, E-mail Marketing, Social medias manage-ment, Adword) with more than 19 years of experience. Working in all industries and with small, median and large companies. We are certified Google Partner, Google AdWords and Facebook Business. Our team is specialized in digital communication with a differentiated vision on the main tool of this in-dustry, standing out in a very competitive and ever changing market, adapting and finding ways to make our clients stand out.

New member

Welcome Rede Digital !

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New member

Our strengths • Legal and tax advice second to none • Full-service practice • Independent with

an international scope • Innovative and pragmatic • Focused and engaged

Full-service practice • As a leading firm, Loyens & Loeff is the natural choice for a legal and tax

partner if you do business in or from the Netherlands, Belgium, Luxembourg and Switzerland, our

home markets. You can count on personal advice from any of our 900 advisers based in one of

our offices in the Benelux and Switzerland or in key financial centres around the world. Thanks to

our full-service practice, specific sector experience and thorough understanding of the market,

our advisers comprehend exactly what you need.

Independent and international • As a fully independent law firm, Loyens & Loeff is excellently

positioned to coordinate international tax and legal matters. We have our own network of offices

in major financial centres, staffed with specialists in Dutch, Belgian, Luxembourg and Swiss law.

Through these offices, our clients have access to Loyens & Loeff’s full-service legal expertise in

their own time zone. Our office network is complemented by our several country desks all of

which are experienced in structuring investments all over the world. It’s a winning combination

that enables us to assist international clients in a very effective way. Moreover, we are on excel-

lent terms with other leading independent law firms and tax consultants. That way, we can gua-

rantee you top-level advice in every part of the world.

Innovative and pragmatic • Each problem requires a customised solution. Our pragmatic appro-

ach and drive to devise innovative solutions allow us to effectively address the demands of our

clients’ domestic and international businesses. Thanks to the broad range of our legal experien-

ce, know-how and the size of our practices, we can offer you top-level advice, locally and interna-

tionally. We are committed to meeting your needs at the highest quality level in the most efficient

way.

Focused and engaged • Entrepreneurship, client focus, quality awareness, and social engage-

ment all characterise our firm’s culture. We offer a challenging work environment and equal op-

portunities for all our employees. We are mindful of the environment and help charities with the

support and knowledge of our employees.

Our offices • Amsterdam, Arnhem, Brussels, Dubai, Hong Kong, London, Luxembourg, New

York, Paris, Rotterdam, Singapore, Tokyo, Zurich.

Welcome Loyens & Loeff N.V. !

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The Oil and Gas committee of Dutcham will offer a limited number of participants from within its membership to a breakfast on July 21st of 2016, at 9 am, in the headquarters of KPMG located at Street Almi-rante Barroso, nº 52 / 4º floor, Downtown Rio de Janeiro.

During the event, a short list of topics for discussion during this and futu-re commitee meetings will be elaborated. Initial ideas include: An intro-duction of the aspects of the GRC-Governance, Risk and Compliance, and Tax Law subjects related to the sector, followed by questions rela-ted to financing projects and businesses between Brazil and the Nether-lands.

Some subjects were already proposed and we would like to know from the associates which subjects that are listed bellow would most interest them:

i.Illegality of late interests on renewing the Temporary Admission Regime (Regime de Admissão Temporária);

ii.Illegality of the prohibition to use the REPETRO Regime for goods with low amounts (less than US$ 25.000,00);

iii. The unconstitutionality of the Agreement of VAT (ICMS) nº 42 of May 3rd of 2016, which authorized the states to (a) conditioning the fulfillment of the fiscal/ financial benefits to the deposit of at least 10% of the amount of the benefit into the “Fiscal Balance Fund” or (b) reduce the amount of such benefits in the equal proportion.

iv.Social Security Contributions related to firing in the Sector of O&G, as well as the possibility of recovering credits;

v.Taxation of Dutch expatriates in Brazil;

vi.Considerations into the new project of BEPS- Base Erosion and Profit Shifting.

Other suggestions are of course equally welcome.

Representatives of Dutcham member companies interested in participa-tion should send an e-mail a.s.a.p. to the hosting sponsor KPMG, c/o Mr. Anderson Dutra, e-mail [email protected]

Oil and Gas Committee invite to

Breakfast

mailto:[email protected]

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Become a Dutcham

Member About Dutcham:

The Dutch Brazilian Chamber of Commerce is a non-profit organization to Brazilian law,

founded in 1952 and registered under tax number CNPJ 61.786.638/0001-94. It has a

Board of Directors elected by General Assembly, and Advisory Boards in both Brazil and

The Netherlands. Its function is to promote and assist trade and investments between Bra-

zil and the Netherlands.

About membership:

Membership is voluntary. People may apply for inclusion in the mailing list free of charge

and receive monthly electronic newsletters and invitations for some events. This mailing-

list, however, is frequently updated and filtered down, while participation in events for non-

members may depend on available places.

Acceptance of membership is subject to approval by the board of directors, and is limited

to companies that adopt high standards of business conduct and appropriate social behav-

ior.

If interested in becoming a Dutcham Member, please send an email to [email protected]

Sustaining Members:

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Membership offers the following advantages:

Inclusion in Dutcham’s Web-site, with link

Preferential indications, introductions and reference supply

Free copies of all Dutcham publications

Preferential invitation for editorial contributions

Voting power at member assemblies and candidature for (Advisory)

Board positions through Dutcham’s “ranking system”

Invitation to all events, including the ones limited to members

Free yearly membership certificate upon request

Free assistance in most issues related to bilateral trade and invest-

ments

25% discount on all services, advertisements or sponsorship fees

Discounts for several intra-member services and events

Sustaining membership offers the following advantages, on top of the

above:

Special package deals covering all initiatives

Mentioning of honor in all Dutcham publications

Electronic banner with link on the opening page of Dutcham’s web-

site

Physical banner with logo placed at all Dutcham events

Automatic candidacy for board positions

Divulgation in Dutcham’s social media such as LinkedIn and Face-

book.

Membership benefits:

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number 10 dutcham magazine magazine 3 3 hans mulder [email protected] marina fujihara...

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