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v3.23.3

Taxes | 6 Months Ended
--- | ---
Jun. 30, 2023
Notes and other explanatory information [abstract] |
Taxes |
| 12. | Taxes
| 12.1. | Income taxes
Summary of income taxes |  |  |  |  |  |
| Current assets | Current liabilities | Non-current liabilities
| 06.30.2023 | 12.31.2022 | 06.30.2023 | 12.31.2022 | 06.30.2023 | 12.31.2022
Taxes in Brazil |  |  |  |  |  |
Income taxes | 199 | 160 | 144 | 2,505 | − | −
Income taxes - Tax settlement programs | − | − | 56 | 50 | 315 | 302
| 199 | 160 | 200 | 2,555 | 315 | 302
Taxes abroad | 4 | 5 | 370 | 328 | − | −
Total | 203 | 165 | 570 | 2,883 | 315 | 302
Reconciliation between statutory income tax rate and effective income tax rate The following table provides the reconciliation of Brazilian statutory tax rate to the Company’s effective rate on income before income taxes:
Summary of outstanding amount of settlement year |  |  |  |
| Jan-Jun/2023 | Jan-Jun/2022 | Apr-Jun/2023 | Apr-Jun/2022
Net income before income taxes | 19,401 | 29,564 | 8,435 | 16,350
Nominal income taxes computed based on Brazilian statutory corporate tax rates (34%) | (6,597) | (10,051) | (2,868) | (5,559)
Adjustments to arrive at the effective tax rate: |  |  |  |
Tax benefits from the deduction of interest on capital distributions | 611 | 383 | 611 | 383
Different jurisdictional tax rates for companies abroad | 101 | 394 | (145) | 203
Brazilian income taxes on income of companies incorporated outside Brazil (1) | (196) | (628) | (95) | (329)
Tax incentives | 77 | 8 | 34 | 2
Tax loss carryforwards (unrecognized tax losses) | (17) | (1) | (12) | (10)
Non-taxable income (non-deductible expenses), net | 4 | 68 | (2) | 44
Post-employment benefits | (178) | (186) | (101) | (44)
Results of equity-accounted investments in Brazil and abroad | 11 | 120 | - | (3)
Others | 12 | 18 | 2 | 4
Income taxes | (6,172) | (9,875) | (2,576) | (5,309)
Deferred income taxes | (1,485) | (1,989) | (813) | (28)
Current income taxes | (4,687) | (7,886) | (1,763) | (5,281)
Effective tax rate of income taxes | 31.8% | 33.4% | 30.5% | 32.5%
(1) | It relates to Brazilian income taxes on earnings of offshore investees, as established by Law No. 12,973/2014.
Deferred income taxes - non-current The changes in the deferred income taxes are presented as follows:
Summary of the changes in the deferred income taxes |  |
| Jan-Jun/2023 | Jan-Jun/2022
Opening balance | (5,918) | (625)
Recognized in the statement of income for the period | (1,485) | (1,989)
Recognized in shareholders’ equity | (2,380) | (2,571)
Translation adjustment | (671) | (29)
Use of tax loss carryforwards | − | (1,137)
Others | 25 | 4
Closing balance | (10,429) | (6,347)
The composition of deferred tax assets and liabilities is set out in the following table:
Summary of composition of deferred tax assets and liabilities |  |  |
Nature | Realization basis | 06.30.2023 | 12.31.2022
PP&E - Exploration and decommissioning costs | Depreciation, amortization and write-offs of assets | 914 | 158
PP&E - Impairment | Amortization, impairment reversals and write-offs of assets | 3,774 | 3,602
PP&E - depreciation methods and capitalized borrowing costs | Depreciation, amortization and write-offs of assets | (17,561) | (15,438)
Loans, trade and other receivables / payables and financing | Payments, receipts and considerations | (1,805) | 810
Lease liabilities | Appropriation of the considerations | (305) | 434
Provision for legal proceedings | Payments and use of provisions | 1,055 | 885
Tax loss carryforwards | Taxable income compensation | 953 | 914
Inventories | Sales, write-downs and losses | 188 | 333
Employee Benefits | Payments and use of provisions | 1,534 | 1,518
Others |  | 824 | 866
Total |  | (10,429) | (5,918)
Deferred tax assets |  | 671 | 832
Deferred tax liabilities |  | (11,100) | (6,750)
Uncertain tax treatments Between April and July, 2023, the Company received additional charges from the Dutch tax authority, due to a final assessment on the calculation of the Corporate Income Tax (CIT) of subsidiaries in the Netherlands from 2018 to 2020, arising from the valuation for tax purposes of platforms and equipment nationalized under the Repetro tax regime, in the amount of US$ 490. Tax treatments of certain subsidiaries from 2019 to 2022 have not yet been assessed by this tax authority. Any charges by the Dutch tax authority for those years, on a similar basis to the periods already assessed, could reach the amount of US$ 327. Thus, the total amount of these uncertain tax treatments is US$ 817. The Company continues to defend its position but understands that it is not probable that the tax authority will fully accept this tax treatment. Thus, a liability was recognized with a corresponding effect in income taxes within the statement of income for the period, by means of the expected value method, constituted by the sum of amounts weighted by the probability of loss.
| 12.2. | Other taxes
Summary of other taxes |  |  |  |  |  |  |  |
| Current assets | Non-current assets | Current liabilities | Non-current liabilities (1)
| 06.30.2023 | 12.31.2022 | 06.30.2023 | 12.31.2022 | 06.30.2023 | 12.31.2022 | 06.30.2023 | 12.31.2022
Taxes in Brazil |  |  |  |  |  |  |  |
Current / Non-current ICMS (VAT) | 725 | 716 | 541 | 473 | 927 | 699 | − | −
Current / Non-current PIS and COFINS | 326 | 378 | 2,699 | 2,362 | 121 | 28 | 118 | 89
Claim to recover PIS and COFINS | − | − | 724 | 657 | − | − | − | −
CIDE | − | 1 | − | − | − | 5 | − | −
Production taxes | − | − | − | − | 1,815 | 1,996 | 149 | 114
Withholding income taxes | − | − | − | − | 87 | 149 | − | −
Others (2) | 57 | 40 | 294 | 273 | 293 | 152 | 90 | 90
Total in Brazil | 1,108 | 1,135 | 4,258 | 3,765 | 3,243 | 3,029 | 357 | 293
Taxes abroad | 8 | 7 | 12 | 13 | 33 | 19 | − | −
Total | 1,116 | 1,142 | 4,270 | 3,778 | 3,276 | 3,048 | 357 | 293
(1) | Other non-current taxes are classified within other non-current liabilities in the balance sheet.
(2) | At June 30, 2023, it includes US$ 117 in current liabilities relating to export tax over crude oil, which was in effect from March 1 to June 30, 2023.

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