This excerpt taken from the PBR 20-F filed May 22, 2009.
Taxation on Interest on Shareholders Equity
Any payment of interest on shareholders equity to holders of ADSs or preferred or common shares, whether or not they are Brazilian residents, is subject to Brazilian withholding income tax at the rate of 15% at the time we record such liability, whether or not the effective payment is made at that time. See Memorandum and Articles of Incorporation of PetrobrasPayment of Dividends and Interest on Shareholders Equity. In the case of non-Brazilian residents that are resident in a tax haven jurisdiction, the applicable withholding income tax rate is 25%. See Beneficiaries Residing or Domiciled in Tax Havens or Low Tax Jurisdiction. The payment of interest at the SELIC rate that is applicable to payments of dividends applies equally to payments of interest on shareholders equity. The determination of whether or not we will make distributions in the form of interest on shareholders equity or in the form of dividends is made by our board of directors at the time distributions are to be made. We cannot determine how our board of directors will make
these determinations in connection with future distributions.