The Specificities of Brazilian Taxation
Brazilian taxation is complex and cumbersome, there are seven taxes payable to nationalize its products (L’II, IPI, AFRMM PIS, COFINS, SISCOMEX tax and ICMS). These taxes on imports into Brazil are cascaded. To facilitate these tax measures Novatrade offers to accompany you in the nationalization of your products thanks to two services customized according to your needs.
The Import Duties and Taxes Calculation is a tool that takes into account these different taxes and allows to directly calculate the price delivered customs clearance of your products in Brazil. And the Import and Resale Calculation Simulator, a matrix of automatic calculation of the costs of importing and reselling your products to optimize your logistics import costs.
The Different Taxes of Importation
To get a better understanding of the Brazilian taxes needed to nationalize your products, here are the details:
1. Customs Taxes (II)
Since January 1st, 1995 Common External Tariff has come into force (Tarifa Externa Comum – TEC) for the Mercosur’s countries (Argentina, Brazil, Paraguay & Uruguay). The rates vary from 0 to 35 %. For Brazil, Common External Tariff on application concerns roughly 85 % of the products in circulation. Some exceptions exist as for the 23 % maximum rate or for a harmonized taxation. These will be disappear on January, 1st 2006
Calcul = VA *Rate II
VA : Valor Aduaneira Including the value of the FOB goods, international transport, insurance and unloading on arrival (THC)
Portuguese Term: Imposto de importação
2. Tax on Industrialized products (IPI)
It is a federal tax. The rates depend on the product(s) concerned. In the case of an import, the plate is the CIF price plus customs duties and change fees paid by importer.
Calcul : (VA + Amount of Import tTax II) * IPI rate
Portuguese Term: Imposto sobre Produtos Industrializados
3. Tax for Renewal of Merchant Marine (AFRMM)
Imports transported by sea support this tax only, set at 25% of ocean freight.
Calcul : Freight * Rate AFRMM
Portuguese Term: Adicional ao Frete para Renovação da Marinha Mercante
4. PIS/PASEP and COFINS
Due to law n° 10.865/01 from May 30th, 2004, Brazilian government provides the recovery of
PIS/PASEP & COFINS on goods and services import, as it is the case for the national ones. The rates are respectively 1,65% and 7,6%. Meanwhile, the value may vary for some goods (eg: oil products, tires, packaging, etc…)
To do this, government is based on a law established by the Treaty Of Marrakech (WTO), which gives to each country the prerogative to apply to imported products the same tax treatment as for domestic goods.
Portuguese Term: “Programa de Integração Social”, “Programa de Formação do Patrimônio do Servidor”, “Contribuição para o Financiamento da Seguridade Social”
5. SISCOMEX Tax
Tax due for the use of the Computer System of Foreign Trade (Siscomex).
This is a Federal Tax which varies according to the number of products and customs code NCM.
Rate : 185 réais + 29.5 réais by addition (different product) in the import declaration.
Portuguese Term: Sistemas de Comércio Exterior
6. Tax on Movement of Goods and Services (ICMS)
It is a tax administered by the states. It varies according to federal States and products. It works more or less as VAT, calculated on value added and give right to tax credits, when the trading is subject to non-cumulative regime.
Portuguese Term: Imposto sobre Circulação de Mercadorias e prestações de Serviços