The import of aircraft parts can demand authorization from various entities, and might benefit from various tax exemptions as well. This article will outline the necessary steps in this process.
After years of being a supporting player in the aerospace industry, Brazil is now an important market. With some cities like São José dos Campos acting as a development pole for this business, the Brazilian market has gained international significance in this field.
According to data from IPEA, the Institute of Applied Economic Research, there are more companies importing into the Brazilian aerospace industry than there are companies exporting. Since the national industry is not fully capable of producing all the components needed by aircrafts in Brazil, the import of parts has a vital role in this market.
All import processes involving Brazil are supervised and regulated by the Brazilian Federal Revenue. In the case of aircraft parts, ANAC - Agência Nacional de Aviação Civil, or National Agency of Civil Aviation - are also responsible. This agency needs to be informed which products are entering the country and being installed in Brazilian aircrafts.
Various other entities might also be responsible for importing aircraft parts to Brazil, depending on the type of goods. For example, if radiocommunication devices are imported, the National Agency of Telecommunications (Anatel) are one of the responsible parties; if a product that liberates any kind of radiation enters the country, the National Comission of Nuclear Energy (CNEN) must authorize it; if the aircraft part is pollutant, the Brazilian Institute of the Environment (Ibama) will be informed of the process.
For each specific entity involved in the process, a specific authorization will be needed. It is recommended that importers check with these agencies which permits must be issued.
COTAC, which stands for Coordination Committee for the Civil Air Transport, is an entity associated to ANAC that in the past regulated the import of aircrafts and its parts to Brazil. Since 2012, the consent of COTAC is no longer necessary during this process, making it a little less complicated. However, the numerous stages that exist with these types of imports still make it a time demanding process.
First and foremost, anyone wanting to import aircraft parts to Brazil must be registered with:
- REI - Registro de Exportadores e Importadores, or Importers and Exporters Registry, which is associated to the Foreign Trade Secretariat (Secex)
- Siscomex - Sistema Integrado de Comércio Exterior, or Integrated System of Foreign Trade
To access Siscomex, importers also need to own a Radar license, provided by the Federal Revenue. Through Siscomex, the importer registers all the information of the commercial operation and the goods that will be imported. This is necessary to issue other documents that are needed, such as:
- DI - Declaração de Importação, or Import Declaration
- LI - Licenciamento Não-Automático de Importação, or Non-Automatic Import License
- ROF - Registro de Operações Financeiras, or Recording of Financial Transactions
- Extract of the Import Declaration, detailing the transaction information
After all the above documentation is issued and approved, the clearance of goods can happen. At this point, it is necessary to present proof of payment of the required taxes.
Other documents are needed besides the ones mentioned above. Specific forms must be completed according to the exporting country, aircraft part, or if the import occurs under an international agreement.
As a rule of thumb, the following documents are necessary:
- Bill of lading
- Commercial invoice
- Tax payment receipt
Authorization by ANAC
The only form required specifically by ANAC is a tracking document known as an Authorized Release Certificate. It is also known as an Airworthiness Approval Tag, Form One or 8130-1.
This document contains information about the importing company, the list of parts being imported and serial number of each part. It basically certificates that the imported parts have been approved by Brazilian regulations.
There are no specific taxes for importing aircraft parts to Brazil. Currently, the taxes applied in this process are:
- ICMS - State Tax on Circulation of Goods and Services
- II - Import Tax
- IPI - Tax on Industrialized Products
- Cofins - Contribution for Social Security Financing
- PIS - Social Integration Program
There is a ICMS reduction for this kind of import, currently valid until the end of July 2014. However, it is likely that this benefit will be extended after the expiration date. Even though ICMS varies from state to state, there is a mutual agreement between each state establishing a national rate of 4% on imported aircraft parts.
The payment of II and IPI might also be unnecessary in some cases. The main condition is that these goods are destined to repair or maintain the aircrafts in Brazil.
Parts, tools, and components that will be used to repair, modernize or industrialize certain aircrafts are also exempt from paying both PIS and Cofins.
So in the end, the only tax currently levied on the import of most aircraft parts and pieces is ICMS, which can also be reduced. There are other costs, though, for issuing documents, registering and shipping the goods.
We would like to thank Thiago Medaglia, partner of the Brazilian law firm Felsberg Advogados, for the background information to this article.