TFPG: inspection fee for oil and gas industry comes into effect

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The Fee for the Control, Monitoring, and Inspection of Oil and Gas Exploration and Production Activities (TFPG) in the state of Rio de Janeiro took effect on April 1, 2024. Implemented by State Law No. 10,254/2023, this fee is payable monthly by the 10th business day following the month in question.

Companies involved in exploration and production activities subject to control, registration, monitoring, appraisal, and inspection must be aware of this new requirement. Businesses operating in the oil and gas industry should plan ahead to comply with this new tax requirement starting this month.

Fee amount and possibilities for reduction

The monthly fee is set at 10,000 UFIRs (statutory inflation-adjustment index), per contracted area, payable by the taxpayer. 

The UFIR in the Rio de Janeiro state for 2024 has been set by Sefaz Resolution No. 597/2023, which provides that each unit amounts to BRL 4.5373. Thus, the TFPG is assessed at BRL 45,373.00.

The regulation allows for a reduction of the fee by up to 80% upon the taxpayer's request in the following situations:

• Blocks in the exploration phase, provided no drilling activity has commenced;
• Small production fields, as defined by the National Petroleum and Gas Agency (ANP);
• Mature fields in production, as defined by the ANP;
• Marginal fields, as defined by the ANP;
• Fields where there were no records of flaring or extraordinary losses of natural gas in the previous year, irrespective of authorization or validation, as defined by the ANP;
• Fields where the reinjection of natural gas, solely for the purpose of hydrocarbon recovery, constituted up to 30% of the total volume produced
• .

In the case of areas under a concession agreement that are subject to special participation, under a production sharing contract or an onerous assignment, the fee cannot be reduced and must be paid in full.

Applicable penalties

Failure to pay the fee, underpayment, or late payment will result in a 20% fine based on the amount due, in addition to the enforcement of the fee.

The legislation further specifies that if the fee is not paid within the specified deadlines and conditions, the following penalties will apply:

• Interest on arrears at the Selic rate, applicable to federal bonds, accrued monthly from the first day of the month following the payment deadline until the last day of the month before payment, plus 1% for the month in which payment is made;
• A late payment fine of 0.33% per day of delay, calculated from the day after the due date until the actual payment date, capped at 20%.

Additionally, anyone who uses or causes the use of a simulated document related to the TFPG payment, or one containing false authentication, will be subject to a fine of 150% of the fee amount due.

Solutions for the oil & gas industry

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