Countries within MERCOSUL (Southern Common Market) are exempt from Brazilian import duties. These countries are Argentina, Paraguay and Uruguay. Associate members (Bolivia, Chile, Colombia, Ecuador and Peru) are exempt from some duties & receive discounts on other duties, generally depending on the reciprocal tax status provided to Brazilian exporters in these countries.
All other exporting nations must pay import tax(with the exception of specially exempted products, which are deemed to be adding value to Brazil). This tax (I.I.) ranges from 0%-20%.This is however the first tax in a long line of cumulative taxes making the effective rate higher in reality than that quoted. All taxes are cumulative so the order in which they are applied is very important & can quite significantly alter the total cost of these taxes.
Import Duties and Sales Taxes
Products delivered to Brazil are subject to import duties. Brazil’s government sets product classifications that determine rates for specific products. It is important to check the sub-classifications as there are a wide variation of import tax rates.
Imposto de Importação (II) – Import Tax
This is a Federal tax applied to imported products. The rate varies depending on the HS code of the product being imported and in the case of trade agreements, the manufacturing country.
Imposto sobre Produtos Industrializados (IPI) – Industrialised Products Tax
This is a Federal tax that applies at rates set regularly by the government. It ranges from 0% up to 300%(for cigarrettes) and again, is determined by the HS code of the product.
Programa de Integração Social (PIS) – Social Integration Program
This is a Federal tax applied to all business revenues at a rate of 1.65% that is used to fund unemployment insurance for workers that earn less than two times the minimum wage(currently R$622 per month)
Contribuição para o Financiamento da Seguridade Social (COFINS) – Social Security Contribution
This is a Federal tax applied to all business revenues at a rate of 7.6% that is used to fund social security programs such as health, education and social assistance.
Imposto sobre Circulação de Mercadorias e Serviços (ICMS) – Merchandise & Services Tax
This is a state tax applied predominantly to the circulation of merchandise. The tax is applied whenever the product leaves a business, regardless of whether it is sold or not. Companies transferring goods between warehouses, for example, must have documentation showing the value of the goods and the ICMS they have generated. The tax is applied in a similar method to a VAT or GST, whereby it is not cumulative and taxes paid on inputs can be offset against those payable for sales.This tax varies by product and state. It is highest for all products in São Paulo state, but is levied based on the destination rather than the source of the sale, meaning that although importing into a different state would create a lower initial ICMS obligation, the final result would be the same with just a smaller amount being paid at the importation stage and a higher amount being outstanding when the product is sold.
Fees & Charges
Import Agent fee
This is for an agent, known as a 'despachante', to process the importation through customs. A good despachante is worth their weight in gold as they can make a huge difference to the time taken to clear a product through the port, saving money in the process(see port storage).
SISCOMEX System Charge
This is the Brazilian Government's Customs system and this fee is payable for any importation. The charge is R$30 + R$10 for each different HS Tariff code in the importation. Some despechantes also charge a R$180 Siscomex registration charge for each importation.
Customs Clearers Syndicate (S.D.A.) fee
This is a union fee that is payable on all imports through Brazilian ports(Air, Sea & Land).
AFRMM - Additional Freight charge for renovation of the Merchant Navy
This fee is calculated at 25% of the combined cost of freight and insurance for all imports through a Brazilian Seaport. This charge is designed to provide funds to improve the Brazilian merchant navy fleet(tugs, etc) and streamline the aquatic transport system.
This is the charge for storage in Customs whilst the import process is being completed. It costs approximately R$200 per day for a standard 20ft container and obviously this total will vary depending on the speed of the import process.
This is the Brazilian Customs charge to clear the shipment. This is the process during which customs will check if the product is legally allowed to enter the country, whether it meets any required standards, that the price is a legitimate price(some importers of products have been known to value goods significantly below market to avoid taxes). This is not advised as the fines & penalties imposed when caught are significant and often include the confiscation of the entire shipment of goods.
Import Tax Analysis
Braanz is able to provide import tax analysis for any product entering Brazil. We can provide an import study including the following:
- Estimated shipping costs from your country to Brazil for your products
- Customs paperwork required to register and nationalise your product
- Customs clearance fees and charges
- Federal and State taxes applicable to your product, along with applicable information regarding any advantages available by importing to specific states
- Local licensing and certification requirements and procedures
- Available options for local transport and storage