Most common taxes to import products from Brazil

What ‘export rates’ are?

When we think of taxes on exports, we think about expenses. One should be aware of the entire process to know about the documents to be issued, legislation, transportation, internal taxes, service providers’ fees, import taxes that are collected at the time that the goods are withdrawn, tax exemptions and obligations, financial and banking costs, among others.

We have listed below some of the most common taxes charged by the Brazilian Federal Revenue regarding exports:

EXPORT TAX (IE)

According to the Brazilian Federal Constitution, the export tax is generated when a national or nationalized product leaves the country.

One of its features is the collection with taxation and regulatory functions:

➤ FACTOR THAT GENERATES THE EXPORT TAX: The event that generates the Export Tax is characterized at the moment of the registration issued by SISCOMEX (A Federal Revenue System) for the exit of national or nationalized materials from Brazilian territory to be sent to other countries, whatever the purpose of those leads is. With the exception of personal cases, such as luggage, it doesn’t matter if the export is classified as donation or if the owner and the final importer are the same person or organization: the exit of goods out of Brazil is subject to taxation.

➤ CALCULATION BASIS: The basis for calculating the tax is the price that a specific product (or comparable item) will reach at the export time.

➤ TAX RATES: The tax rate of the IE is 30%, which can be reduced or increased by the Brazilian Executive Power to meet the exchange rate and foreign trade policy goals.

➤ CONTRIBUTOR: The taxpayer is the exporter or its legal representative.

ICMS

The export of manufactured goods is immune to ICMS . Although not immune, the export of primary products and semi-finished products may also have ICMS exemption in many cases.

IPI

Industrialized products intended for export, from national or foreign origin, are, with no-exception, immune from the IPI tax.

PIS

In Brazil, exports are exempted from PIS, being the exported goods either finished products or service provisions.

COFINS

In 1991, a complementary Brazilian law granted exemption of COFINS on revenues derived from the export of goods, even when conducted through cooperatives, consortia or similar entities, including trading companies.

ISS

The ISS is not levied on the exports of services. Nevertheless, services developed in Brazil, for which the final result is verified inside national territory are taxable.

EXPORT EARNINGS

Gross sales revenue in exports of domestic manufactured products should be determined by the conversion, into R$, of its value expressed in foreign currency according to the rate fixed at the shipment date of the products to foreign countries.

SOCIAL SECURITY CONTRIBUTION (INSS) – INTERNATIONAL SALES OF RURAL PRODUCTS

There is no INSS on the revenue from the export of rural products.

Even though a meticulous analysis of each individual and specific case must be thoroughly done in order  to determine which taxation the Brazilian product or service you are planning to import is subject to, another important strategy, not always remembered, is to evaluate the tax incentives, because due to the lack of knowledge, they  are being commonly underutilized in companies.

We are looking forward to hearing from you and clear up any doubts on TAXES or any other issues regarding the import of Brazilian goods. Do not hesitate on talking to us.

Major Brazilian ports

There are more than 2000 ports in the world, each with its size and its purpose. In Brazil, according to the Secretaria de Portos (SEP), there are 235 port facilities – taking into account public and private infrastructures. Among these 235 port facilities 37 are considered Public Ports (administered by the federal government – either through the dock companies or through municipal, state or public consortiums), and 161 are river ports.

10 Brazilian Main Ports

The main ports in Brazil are determined according to their efficiency. To this end, it is taken into consideration:

– Cargo volume handled,
– Amount of US$ it generates,
– Size of the port, and
– Influence area.

According to IPEA (Institute of Applied Economic Research), the sum of the factors mentioned above led to the following ranking:

 

NUMBER 1: SANTOS PORT (SP)

Location: Santos/SP
Size: National
Area of influence: SP, GO, MT, MS, MG, RJ, PR, ES, BA, RS, TO, RO and DF.
Participation in the foreign trade of the state of São Paulo: 84, 5%
Amount of US$ it generates: US$ 29,400 million.
How many states use this port: 27
Added value of the exported goods: Medium
Main sectors: mechanical industry, chemical industry, food and beverages, transportation equipment, agribusiness and wood.
Highlights: It is the main Brazilian port in all aspects and the only one that seeps products from 24 Brazilian states.

 

NUMBER 2: PORT OF PARANAGUÁ (PR)

Location: Paranaguá/PR
Size: Large
Area of influence: PR, MT, SC, SP, RJ, RS, RN, AC, TO and GO.
Participation in the foreign trade of the state of Paraná: 27, 1%
Amount of US$ it generates: US$ 7,600 million.
How many states use this port: 4
Added value of the exported goods: Low
Main sectors: agribusiness, wood, food and beverage.
Highlights: The total value of exported goods has greater significance than the imported amount. The 20 most exported products exceeded US$ 30 million.

 

NUMBER 3: RIO DE JANEIRO PORT (RJ)

Location: Rio de Janeiro/RJ
Size: Large
Area of influence: RJ, MG, SP and ES.
Participation in the foreign trade of the state of Rio de Janeiro: 37, 6%
Amount of US$ it generates: US $ 5 200 million.
How many states use this port: 23
Added value of the exported goods: Medium
Main sectors: metallurgy, transportation equipment, chemical industry, mechanical industry and mineral products.
Highlights: The type of cargo handled at this port is quite diversified and concentrated in the manufacturing industry, which means higher added value per unit of each of the exported products.

 

NUMBER 4: PORT OF ITAJAÍ (SC)

Location: Itajaí/SC
Size: Medium
Area of influence: SC, PR, RS, SP and AC.
Participation in Santa Catarina’s foreign trade: 44, 2%
Amount of US$ it generates: US $ 2 900 million.
How many states use this port: 19
Added value of the exported goods: High
Main sectors: agribusiness, wood, footwear, leather, chemical industry, mechanical industry, food and beverage.
Highlights: It is the second port with higher added value products being handled in Brazil, registering about 1.000 US dollars per ton.

 

NUMBER 5: PORT OF VITÓRIA (ES)

Location: Vitória/ES
Size: Large
Area of influence: ES, MG, GO, BA and SP.
Participation in the foreign trade of Espirito Santo state: 53, 9%
Amount of US$ it generates: US $ 8,200 million
How many states use this port: 19
Added value of the exported goods: Low
Main sectors: metallurgy, mineral products, cellulose and paper, agribusiness and wood.
Highlights: The main specialization of the port is the marketing of iron and iron ore.

 

NUMBER 6: PORT OF RIO GRANDE (RS)

Location: Rio Grande/RS
Size: Large
Area of influence: RS and SP.
Participation in the foreign trade of Rio Grande do Sul: 57, 9%
Amount of US$ it generates: $ 6.200 million.
How many states use this port: 21
Added value of the exported goods: Medium
Main sectors: agribusiness and wood, footwear and leather, chemical industry, mechanical industry, food and beverage.
Highlights: Forty-four products recorded export values higher than US$ 10 million and all of the 20 most imported products exceeded US$ 40 million.

 

NUMBER 7: PORT OF SÃO FRANCISCO DO SUL (SC)

Location: San Francisco do Sul/SC
Size: Medium
Area of influence: SC and PR.
Participation in the Santa Catarina’s foreign trade: 36, 0%
Amount of US$ it generates: US$ 2,500 million
How many states use this port: 19
Added value of the exported goods: Medium
Main sectors: agribusiness ,wood, mechanical industry and mineral products.
Highlights: Soya beans exports through this port totalize over 430 million dollars.

 

NUMBER 8: PORT OF SALVADOR (BA)

Location: Salvador/BA
Size: Medium
Area of influence: BA and SE.
Participation in Bahia’s foreign trade: 46, 4%
Amount of US$ it generates: US$ 2,300 million.
How many states use this port: 22
Added value of the exported goods: High
Main sectors: transportation equipment, chemical industry, metallurgy, mineral products, agribusiness and wood.
Highlights: The most exported products through this port are vehicles and the second one is crude oil.

 

NUMBER 9: PORT OF MANAUS (AM)

Location: Manaus/AM
Size: Medium
Area of influence: AM and MT.
Participation in the foreign trade of the state of Manaus: 42, 8%
Amount of US$ it generates: US$ 2,300 million.
How many states use this port: 13
Added value of the exported goods: High
Main sectors: electrical and electronics, mechanical industry.
Highlights: It is the port with higher added value products handled.

NUMBER 10 – PORT OF ARATU (BA)

Location: Aratu/BA
Size: Medium
Area of influence: BA.
Participation in Bahia’s foreign trade: 33, 8%
Amount of US$ it generates: US$ 1,800 million
How many states use this port: 8
Added value of the exported goods: Low
Main sectors: mineral products and chemical industry.
Highlights: This port exports an average amount of US$ 443 million in petroleum oils. In general, the port of Aratu handles products originated from the Camaçari Petrochemical Complex.

Stay current on International Trade news. Get the Doracorp (weekly) Newsletter.

Golden tips for importing from Brazil

It has been attested by specialists that the depreciation of the Brazilian real made the country’s account deficit  to improve. On the other hand, this depreciation of the local currency also represents a help to boost Brazil’s export competitiveness.

If you are planning on importing goods from Brazil, this current instability of the country’s political and economical areas might turn the present moment into the right time to start doing business in Brazil.

However South America’s largest economy and market is known for being among the most challenging nations in the world to do business, having local expertise in the country will guarantee the success of your overseas venture.

Being aware of that, Doracorp’s team listed some things you must consider before making the leap.

 

Key hints to guarantee your success when acquiring Brazil’s exports

As mentioned on the previous post, Brazil is very abundant in agricultural, mineral, and energy resources. These advantages have permitted the country to develop diversified industrial and economic bases. With an economically active population of 109 million people, one of Brazil’s main competitive  advantages lies on the Brazilian consumer confidence increase. This consumption growth boosted some economic sectors and gave producers and manufacturers more capital availability either to invest in new areas, to enhance their manufacturing or to improve their products to make them competitive in foreign markets.

 

Export Incentives

Brazil’s governors promote many incentives in order to promoting Brazilian exports. These incentives vary according to the state from which the good is originated, to the purpose of its use, to the type and classification of the product, etc. It is essential to be well informed on everything about the goods you intend to import from Brazil and check all the tariffs and taxes they are exempted of and also the ones that must be paid.

Development

Brazil is still a developing nation. Even though this condition often means that several areas of the economy remain underdeveloped, it can also be interpreted as a precursor for ‘high growth levels’. If you plan on investing in Brazilian acquisitions, in Brazilian corporations or to move your company basis to the country, probably one of the many growth incentive programs that the Brazilian government promotes might help you a lot.

Financing and Export Credit Guarantee

In Brazil there are many measures to stimulate exports. Low-cost financing for capital investments for enterprises and financing incentives for production of goods and services that will be offered in international markets are promoted by the Brazilian government. There is even a list of products approved by the’ Ministry of Development, Industry and Foreign Trade’ in which approved products by eligible firms can be found. Investment opportunities and export incentives are vast, but it is also important to be really well informed about the possible bureaucratic barriers you might have to deal with.

Local Companies Preference

Brazil’s varied economy attracts many companies to move into the country. At present 400 of the world’s 500 largest companies (e.g. Rolls Royce, BG Group, Shell, among others) operate in Brazil. To fight the Brazilians preference for local companies some corporations have been choosing to do so in partnership with local businesses. This makes the transition less impacting for consumers at the same time that it gives the company real insight on local economy and market.

Technology

Brazil has been slowed by the lack of investment on new technology during its development, but now there are joint efforts to improve the country’s infrastructure. In fact, many technology start-ups have grabbed the headlines lately and large corporations have also compromised to dedicate their efforts to help in the country’s economy improvement. This new attitude resulted on technology innovations, an increased production volume and much more sophisticated goods that are equal in quality in comparison to the ones from foreign origin but offer a much attractive
price.

Although each of Brazil’s target markets are also  facing constraints, which will limit the Brazilian export, other conditions, such as weaker Real (BRL) and greater government support, are certainly going to benefit  Brazil to export out of its slowdown.


We have the local knowledge to help you much more, whether you want to streamline your Brazilian operations, or set up in Brazil talk to us and let us make your imports of Brazilian goods a success.

Import from Brazil without unpleasent surprises

In 2014 Brazil became the 23rd largest exporter in the world. During the past five years the import of goods from Brazil has increased at an annual rate of 7.6%. There is a wide variety of things that we export to many countries all over the world. According to the Observatory of Economic Complexity, the top products imported from Brazil are Iron Ore and Soybeans, followed by Crude Petroleum, Raw Sugar and Poultry Meat. To import products from Brazil represents a growing business opportunity.

How difficult is it to import from Brazil?

There are some requirements and specific procedures to be attentive to when you import goods from Brazil. It is a relatively simple process, but to avoid any types of trouble, you would rather familiarize yourself with Brazilian trade laws and regulations that cover exports.

First Considerations:

 Why importing from Brazil;

 What kinds of goods you want to import;

 How to import the chosen items;

 Advantages and disadvantages of importing them from Brazil.

What You Will Need:

Product suppliers

To be sure you are importing from a good supplier, maintain a local business presence.

An import-export attorney in Brazil

This professional will make formal arrangements with the suppliers from whom you intend to buy. He will put in writing everything that could affect you in case of inability to deliver the goods at your port of entry (e.g. pricing, purchasing quotas, shipping details and anything else you consider important).

Licensed Customs broker

To import from Brazil, hire a Brazilian licensed customs broker with specific experience in your product area and task him with classifying every individual good you plan to import according to an international method of product classification. This will be the major determining factors in the duties or taxes you will pay on what you import.

Logistics specialist

Management, logistics and planning play crucial part in international trade. It may become the biggest pain when things don`t move as they were meant to.

Shipping service

Be careful with cheaper freights. They usually charge less by offering a longer transit time. If you make this choice, be prepared to take the risk of possible issues of backlogs at transshipment ports, delays, congestions at final ports and really expensive extra fees. Besides that, if you are importing perishable items, they may arrive useless due to delay, loss of refrigeration and/ or poor handling. Always go for good shipping lines instead.

Pay great attention to:

Documents and Certificates/Typo Mistake and Error in paperwork

The same particular good may require certain kind of certificates and documents for entering in country ‘X’, and totally different papers if you export it to country ‘Y’. This surely will cause shipment to get stuck at the port of destination. Keep in mind that the exporter is the responsible for issuing and/or obtaining all the necessary documents. Make sure he provides everything properly and have your Customs broker in Brazil revise them.

Quality Rejects

Sometimes goods leave port in perfect condition, but arrive damaged at the port of discharge. It often occurs due to faulty containers (water seepage, dust, rust etc.) This causes the entire load rejection. It is important to get the container survey done before goods are stuffed and sealed.

If you want to keep updated and hear more tips on how to prevent mistakes on the topic ‘import from Brazil’, subscribe to our (weekly/monthly) newsletter.

5 Characteristics of the modern importer

Foreign trade have seen a number of changes throughout the years, and competition has never been more fierce, due to, among different reasons, the possibilities in communication and global market research. Find out below 5 of the most important characteristics of and importer who wishes to succeed in the business.

1 – Knows the product and believes in it

The modern importer knows the pros and cons of the product he is buying from a foreign country. It is possible that he familiarized himself with the product in the exporting country, and he has a special belief that this item will be successful also overseas. It may be that he first saw this product in the place it is originally made and was attracted to it, and he eventually found a country that produces it more efficiently and at lower costs. He has studied the product and continually increases his knowledge on it. He has passion for it and believe that this will succeed in a foreign market.

2 – Knows how to handle the barriers that the exporting country may impose

Some countries in development, such as Brazil and India, which have continually grown to export, may present bureaucratic barriers that will slow down the importing process. Tariffs, taxes and regulations and inefficiency in procedures can lead to frustration, and it is crucial that the importer will be patient and know how to deal with such impositions, knowing the best way to
handle some possible difficulties that the exporting country will apply.

3 – Has a B-plan and does not get disappointed easily

The modern importer knows that failing is not the end, but an open door to a potential new opportunity. He is good at dealing with frustration and always has a B-plan if his initial idea did not work out the way he wanted. This B-plan can be a different product, a different market or even a different exporting country. He does not get disappointed easily and knows that by doing the
best he can and believing that he will achieve success, he will eventually get it at the right time.

4 – Knows his competitors

Knowing his competitors, their weaknesses and strengths is fundamental when it comes to be a successful importer. Investigating and studying their history will help a new potential importer to achieve what he wants in a shorter time.
5.  Develops competitive pricing

When importing a product,  developing a competitive pricing is essential, and should include profit margin and commission, among other elements, such as the ones listed below:

– Uniqueness:  Is this a new product in your market?

– Quality – Is this a top quality product or a low-cost “for the masses” one?

– Costs involved in production: How much did it cost to make this product?

– Competition: who are your competitors, and what are your strengths before them that will help you get ahead in the business.

– Product positioning, which is the process marketers use to determine how to best communicate their products’ attributes to their target customers based on customer needs, competitive pressures, available communication channels and carefully crafted key messages.

 

5 Brazilian exporting regulations that you should know

The advantages of importing are many, but doing business in Brazil can be a bureaucratic challenge. See below some of the regulations of exporting from Brazil.

1 – Payment Modalities

Payment in Advance

The transaction value is issued by the importer and the exporter provides the documentation and export of the goods. They must also provide the exchange contract with a bank before shipping the product.

Remittance without Draft

The exporter prepares the documents, ships the goods and  sends the papers to the importer. The payment will be sent once documents and goods have been received.

Documentary collection

It happens when a bank is in charge of all the documents, and act as international debt collector for a transaction previously agreed between the parts, being totally free from any responsibility over the result of the transaction.

Letter of Credit

It is issued by a bank according to the importer’s orders. It assures the payment to the exporter if they follow their obligations.

2 – Main Documents

Pro-forma invoice

It concentrates all basic information on the deal and can be used (by the importer) to go ahead with custom clearance and collect the goods. Not all ports accept them, especially Italian ports.

Nota Fiscal

It must follow the good until it arrives at the shipping location and must be issued in national currency, based on the FOB price conversion from Brazilian reais (BRL) to dollars (USD) on the day it was issued.

Commercial Invoice

Refers to the operation, in which all the information had already been presented on the pro-forma invoice, along with others confirming the transaction. It is issued by the exporter and has to be filled in according to the regulations of the importer country.

Shipping Certificate

it is a document issued by the carrier or its agent, and represents the transportation contract, being the proof that the good has been shipped. It can be accepted by the bank as a guarantee that the good has been shipped.

Packing List

It has the purpose of listing the packages and their contents and is filled in by the exporter, facilitating customs procedures.

Certificate of Origin

It shows where the goods come from, and is issued by accredited entities.

3 – Fiscal Incentives

Exporters are given fiscal incentives (which contribute to tax exemption), such as the decrease of the tax aliquot to 1,5% on top of the billing of companies exporting clothing and furniture, for example. Some of the internal taxes exporter may be free of are PIS, ICMS, IPI, COFINS and IOF.

4 – Norms and Certification

For products to achieve certain quality levels, some procedures are required and in Brazil, ABNT technical norms help  companies to achieve these higher levels. When it comes to international commerce, environmental and technical regulations can be a problem to the Brazilian exports and are called “non-tariff technical barriers” working as a way to protect the market.

5 – Direct and Indirect Commercialization

Direct Commercialization occurs when the exporter is responsible for all the transaction process, from the first contact to the conclusion of the sales. Indirect Commercialization happens when the company has to use a third party, specialized in finding buyers in markets overseas, requiring the participation of a trading company, which acquires goods in the domestic market for export.