Some products being imported for exhibitions in Brazil can benefit from tax exemptions, providing some conditions are followed. This article will explain these conditions and will clarify the definition of samples and giveaways in Brazil.
Brazil has settled itself as an undisputed stage for fairs, exhibitions and trade shows. According to data from the International Congress & Convention Association (ICCA), Brazil was ranked 9th amongst the most popular countries for taking part in these type of events.
With 315 international events in 2013, Brazil was an attractive option by many companies willing to expand their businesses. As a result, many companies need to import goods and other marketing materials to be used in these shows.
The Brazilian government provides tax exemptions for the temporary admission of goods destined for congresses and exhibitions. This import process is a little different to the regular ones, since there are some differences in the documentation needed. For example instead of an Import Declaration (DI) you will need a Simplified Import Declaration (DSI).
However, this exemption is only applicable if the goods being imported are exported after the event. That is includes the stands’ structures, equipment and machines.
The import of giveaways and samples at these fairs have some peculiarities. They are also eligible for tax benefits, but since they are going to be either consumed or distributed for free, without commercial purposes, they do not need to be re-exported.
How it works
When goods are exported to Brazil for congresses, exhibitions and fairs “promotional materials” are eligible to apply for the following exemptions:
- Tax on Industrialized Products (IPI)
- Import Tax (II)
- Contribution for Social Security Financing (Cofins)
- Social Integration Program (PIS)
- Tax on Circulation of Goods and Services (ICMS)
It is important to highlight that, since ICMS is a State tax the rules for this exemption may vary from state to state.
In Brazil, promotional material can be:
- Flyers, pamphlets and catalogues
- Magazines and posters
- Photos, maps, and other graphic materials
- Films, video tapes and DVDs, as long they contain promotional content
- Giveaways and any other goods destined exclusively for promotional use, as long FOB value does not surpass USD 5,000 per exhibitor
Tax exemptions are valid as long as the promotional material is not sold on at a later date. Also, no payment can be conducted from Brazil to other countries. For example, this means that a Brazilian company will not have tax exemption if the material is bought from China and imported for the purposes of trade shows. Therefore the benefits are mainly for international companies bringing products to exhibitions and congresses from abroad.
Companies can also benefit from tax exemption when importing food and beverage samples, as long as they are distributed for free during the trade shows. They must not pass USD 5,000 FOB value.
It is important to highlight that there is no clearly defined limit between what is a sample without commercial value and what is a product that can be sold in Brazil. The classification of the goods being imported can be very subjective, so a large number of the exact same item can be seen as a regular import by Brazilian Customs.
Is an import license needed?
The Brazilian government states that promotional material that is going to be distributed for free in these type of events don’t require registration at Siscomex or need to obtain an import license known as RADAR.
The required document on this import process is DAMP, short for Declaração Aduaneira de Material Promocional, or Customs Declaration of Promotional Material. This form must be completed and presented to customs’ authorities along with papers detailing all the information about the event and proof that the company is participating.
The import of samples without commercial value, like the ones used in exhibitions, can happen without registering at Siscomex as well. A Simplified Import Declaration, which acronym is DSI in Portuguese, must be used instead.
Note that all the documents must be presented by the company or individual that is organizing the trade show in Brazil. The organizer must appear as the beneficiary on the forms, and a statement of responsibility must also be presented with it, containing information about the parties involved.
Foreign companies that are participating in events in Brazil are also required to present a statement of responsibility signed by their country’s diplomatic representation.