2.2.0.7 false Note 4 - Income Taxes 00903 - Disclosure - Note 4 - Income Taxes true false false false 1 USD false false Dollars Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 $ 2 Notes to Financial Statements [Abstract] 0 pbra_NotesToFinancialStatementsAbstract pbra false na duration No definition available. false false false false false true false false false false false false 1 false false false false 0 0 false false false xbrli:stringItemType string No definition available. false 3 Note 4 - Income Taxes 1 us-gaap_IncomeTaxDisclosureTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false false 1 false false false false 0 0 <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> 4. Income Taxes Income taxes in Brazil comprise federal income tax and social contribution, which is an additional federal income tax. The statutory enacted tax rates for income tax and social contribution have been 25% and 9%, respectively, for the nine-month periods ended September 30, 2010 and 2009. The Companys taxable income is substantially generated in Brazil and is therefore subject to the Brazilian statutory tax rate. The following table reconciles the tax calculated based upon the Brazilian statutory tax rate of 34% to the income taxes expenses recorded in the consolidated statements of income. <div align="left"> <table style="FONT-SIZE: 7pt; WIDTH: 100%; FONT-FAMILY: 'Arial'" cellspacing="0" border="0"> <tr> <td width="74%"></td> <td width="1%"></td> <td width="12%"></td> <td width="1%"></td> <td width="12%"></td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td align="right" colspan="3"></td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right" colspan="3">Nine-month periods ended September 30,</td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="TEXT-INDENT: 12px; BORDER-BOTTOM: #000000 1px solid" align="right">2010</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">2009</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Income before income taxes and noncontrolling interests</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 12px" align="left">Brazil</td> <td> </td> <td align="right">17,434</td> <td> </td> <td align="right">15,109</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 12px" align="left">International</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">1,229</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">1,149</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">18,663</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">16,258</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Tax expense at statutory rates - (34%)</td> <td> </td> <td align="right">(6,345)</td> <td> </td> <td align="right">(5,528)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Adjustments to derive effective tax rate:</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 13px" align="left">Non-deductible post-retirement and health-benefits</td> <td> </td> <td align="right">(152)</td> <td> </td> <td align="right">(126)</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 13px" align="left">Tax benefits on interests on shareholders equity</td> <td> </td> <td align="right">1,023</td> <td> </td> <td align="right">802</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 13px" align="left">Foreign income subject to different tax rates</td> <td> </td> <td align="right">227</td> <td> </td> <td align="right">439</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 13px" align="left">Tax incentive (1)</td> <td> </td> <td align="right">95</td> <td> </td> <td align="right">115</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 13px" align="left">Other</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">122</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(66)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Income tax expense per consolidated statement of income</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(5,030)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(4,364)</td> </tr> </table> </div>   (1) On May 10, 2007, the Brazilian Federal Revenue Office recognized Petrobras right to deduct certain tax incentives from income tax payable, covering the tax years of 2006 until 2015. During the nine-month period ended September 30, 2010, Petrobras recognized a tax benefit in the amount of US$95 (US$115 on September 30, 2009) primarily related to these incentives in the Northeast, within the region covered by the Northeast Development Agency (ADENE), granting a 75% reduction in income tax payable, calculated on the profits of the exploration of the incentive activities, which have been accounted for under the flow through method. </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> The following table shows a breakdown between domestic and international income taxes benefits (expenses) attributable to income from continuing operations: <div align="left"> <table style="FONT-SIZE: 7pt; WIDTH: 100%; FONT-FAMILY: 'Arial'" cellspacing="0" border="0"> <tr> <td width="74%"></td> <td width="1%"></td> <td width="12%"></td> <td width="1%"></td> <td width="12%"></td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td align="right" colspan="3"></td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right" colspan="3">Nine-month periods ended September 30,</td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">2010</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">2009</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td align="left">Income taxes expenses per consolidated statement of income:</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 8px" align="left">Brazil</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 14px" align="left">Current</td> <td> </td> <td align="right">(2,979)</td> <td> </td> <td align="right">(3,676)</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 14px" align="left">Deferred</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(1,865)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(385)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(4,844)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(4,061)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 8px" align="left">International</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 14px" align="left">Current</td> <td> </td> <td align="right">(179)</td> <td> </td> <td align="right">(366)</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 14px" align="left">Deferred</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(7)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">63</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(186)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(303)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(5,030)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(4,364)</td> </tr> </table> </div>   </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> The major components of the deferred income tax accounts in the consolidated balance sheets are as follows: <div align="left"> <table style="FONT-SIZE: 7pt; WIDTH: 100%; FONT-FAMILY: 'Arial'" cellspacing="0" border="0"> <tr> <td width="74%"></td> <td width="1%"></td> <td width="12%"></td> <td width="1%"></td> <td width="12%"></td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td align="right"> </td> <td> </td> <td align="right"> </td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">September 30, 2010</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">December 31, 2009</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Current assets</td> <td> </td> <td align="right">474</td> <td> </td> <td align="right">669</td> </tr> <tr valign="bottom"> <td align="left">Valuation allowance</td> <td> </td> <td align="right">(23)</td> <td> </td> <td align="right">(8)</td> </tr> <tr valign="bottom"> <td align="left">Current liabilities</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(11)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(15)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Net current deferred tax assets</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">440</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">646</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Non-current assets</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 9px" align="left">Employees postretirement benefits, net of</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 9px" align="left">Accumulated postretirement benefit reserves adjustments</td> <td> </td> <td align="right">945</td> <td> </td> <td align="right">879</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 9px" align="left">Tax losses carryforwards</td> <td> </td> <td align="right">2,366</td> <td> </td> <td align="right">2,194</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 9px" align="left">Other temporary differences, not significant individually</td> <td> </td> <td align="right">1,320</td> <td> </td> <td align="right">1,091</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 9px" align="left">Valuation allowance</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(1,770)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(1,691)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">2,861</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">2,473</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Non-current liabilities</td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 9px" align="left">Capitalized exploration and development costs</td> <td> </td> <td align="right">(10,623)</td> <td> </td> <td align="right">(8,912)</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 9px" align="left">Property, plant and equipment</td> <td> </td> <td align="right">(1,722)</td> <td> </td> <td align="right">(1,609)</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 9px" align="left">Exchange variation</td> <td> </td> <td align="right">(1,293)</td> <td> </td> <td align="right">(995)</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 9px" align="left">Other temporary differences, not significant individually</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(756)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(526)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(14,394)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(12,042)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Net non-current deferred tax liabilities</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(11,533)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(9,569)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Non-current deferred tax assets</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">365</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">275</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Non-current deferred tax liabilities</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(11,898)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(9,844)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td align="left">Net deferred tax liabilities</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(11,093)</td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(8,923)</td> </tr> </table> </div>   </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%; WIDTH: 100%"> The Company and its subsidiaries file income tax returns in Brazil and in many foreign jurisdictions. These tax returns are open to examination by the respective tax authorities in accordance with each local legislation. As of and for the nine-month period ended September 30, 2010, the Company did not have any material unrecognized tax benefits. Additionally, the Company does not expect that the amount of the unrecognized tax benefits will change significantly within the next twelve months. </div> 4. Income Taxes Income taxes in Brazil comprise federal income tax and social contribution, which is an additional federal income tax. The statutory enacted false false false us-types:textBlockItemType textblock Description containing the entire income tax disclosure. Examples include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables. Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 false 1 2 false UnKnown UnKnown UnKnown false true