Oil & Gas: New Promotional Regime to Import Used Goods for this Industry

The provisions of Decree No. 629/17 have led to the issuance of new Decree No. 555/19 which aims to reduce the tax burden on the import of capital goods used in the Oil & Gas industry. While Decree No. 629/17 was in force until June 30, 2019, there was no applicable promotional regime.

Nevertheless, the system provided for in Decree No. 555/19 cannot be construed as a mere extension of prior benefits, as it establishes lighter commitments for the beneficiaries as well as tax benefits that depend on the age of the goods to be imported.

Only registered Oil & Gas companies and those companies that render services to the Oil & Gas sector may apply for this beneficial regime.

Regulation provides for two different sets of goods according to their tariff line: one group is taxed at a range of 7%-35% depending on the age of the goods  when imported, while others are fully exempt from import duties. The goods in the first group may be up to ten years old when imported, while the second group may be 20 years old. All these goods are fully exempted from paying the tax fee when they are imported.

Promoted goods are exempted from complying with the general import regime for used goods (Resolution No. 909/94) as long as the importer obtains the Import Certificate granted under Decree No. 555/19.

In this regime the importer need not purchase a specific amount of local origin goods. However, it should be noted that all commitments made under Decree No. 629/17 must be complied with on the same conditions under which they were granted.