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How to reduce your import tax in Brazil
If you’re currently managing a business in Brazil, you might have heard of the Ex-tarifário facility. Even though Brazil has taken protectionism measures in order to enhance the national industry, importing goods from abroad sometimes cannot be avoided. The Ex-tarifário was implemented to reduce the costs of foreign investments, modernize the national industrial park, and improve the infrastructure of services in the country.
If you’re a brazilian importer, you should learn more about Ex-tarifário by reading the following lines. Any question about this specific tax device ? Don’t hesitate to request our team of experts, based in Rio de Janeiro, São Paulo, and Fortaleza. We’ll be happy to help you in your administrative queries.
How does the Brazilian Ex-tarifário work ?
An Ex-tarifário is a request for a tariff concession for a specific product which is not manufactured in Brazil. This concession leads to the obtention of a customs classification (NCM) specific to the product, which makes it possible to reduce its Import Tax (II) to 0%.
One should notice that this only applies to products defined in the TEC (Tarifa Externa Comum), such as :
- BK (capital goods)
- BIT (IT and telecommunications),
- or if these goods are not produced in Brazil and / or represent a reduction in the cost of investment.
This tax regime does not apply to second-hand goods, retail products or integrated systems. Only combinations of machines (similar to the integrated systems) which are in the list of the Harmonized System are being analyzed by the CAEx (Comitê de Análise de Ex-tarifários, translated as Ex-tarifário Analysis Committee). This organization makes sure the good to be exported is not produced in Brazil and is responsible for providing the tax reduction.
This specific tax regime is an attempt to stimulate productive investments in the country, increasing the technological innovation of the companies from different sectors of economy and the number of employments, as well as their income. It’s also a mechanism to protect national industries.
This tariff concession notably allows the Brazilian government to upgrade its national industrial park and improve the country’s infrastructure, while fostering :
- Investments in BK (capital goods) and BIT (IT and telecommunications goods)
- Innovation from companies from different economic sectors (with the integration of new technologies that do not exist in Brazil and / or with repercussions on the productivity and competitiveness of the sector concerned)
- Creating jobs and income
How to request an Ex-tarifário ?
Before seeing in detail the procedure for requesting Ex-tarifário, it is important to note that this request must be made by a Brazilian importer. Indeed, it cannot be carried out by a foreign company. Once obtained, the Ex-tarifário can be used by any Brazilian company wishing to import the customer’s products or similar products corresponding to the description given by the Ex-tarifário.
In the past, it was necessary to submit all Ex-tarifário requests to the appreciation of a representative group of Brazilian domestic producers in order to obtain a certificate of non-similarity. The issuance of this authorization took on average 30 days. And in a few rare cases the excess of protectionism of the national industry could delay the issuance of certain authorizations by a few months.
You need to initiate the process as soon as possible ? All you need to do is request an Ex-tarifário from the MDIC (Ministério do Desenvolvimento, Indústria e Comércio Exterior) in Brasilia.
Once these steps for obtaining an Ex-tarifário have been duly completed, the brazilian importer needs to wait for the request to be analyzed by the CAEx and approved by CAMEX (Câmara de Comércio Exterior), two institutions attached to the MDCI. Obtaining the ex-tarifário regime is then communicated through “CAMEX Resolutions” published every three months on the CAMEX website. These resolutions include the updated list of the operative ex-tarifários. The whole request process should take between three and five months.
You need further information about the Ex-tarifário process in Brazil ? Please contact our team of experts, we’ll be truly delighted to help you.
Author's post: Europartner Accounting