The Import Duty is applied to any product that is imported to Brazil, but there are some cases in which this tax is not applied. In this article, we will take a look at Import Duty in Brazil.
The Imposto de Importação, which is Portuguese for Import Duty, or II, is a federal tax charged on all foreign goods imported to Brazil. Thus, the Import Duty is applied when the entry of foreign goods - or of national goods re-entering Brazil - arrive in Brazilian customs territory. The Import Duty is calculated from the moment it is registered as an Import Declaration on Siscomex.
The taxpayers of the II are:
- The importer located in Brazil
- Whoever the law regards as the legal importer of the goods
- The person promoting the entry of the goods from Brazilian territory
Brazil, as a part of Mercosul, unified its Import Duty with other neighbouring countries. Thus, the Import Duty rates applied to goods entering Brazil are the same as the Import Duty rates applied to products entering Argentina, Venezuela, Paraguay and Uruguay. Also, there is no II applied when there is foreign trade of goods between these countries, despite all other due taxes still applying.
Exemptions from Import Duty
The following goods are exempt from Import Duty:
- Foreign goods that, correctly described in the transport documentation, arrive in Brazil due to proven error in the shipment of the goods, and that is shipped again or returned abroad
- Identical foreign goods, of equal quantity and value, intended to replace goods that were previously imported and that, after customs clearance, were proved to be defective or useless
- Foreign goods subject to Pena de Perdimento, which is Portuguese for Confiscation Penalty
- Foreign goods returned abroad before the registry of the Import Declaration
- Vessels built in Brazil and shipped by a Brazilian navigation company to an integral subsidiary abroad, returning for Brazilian registration, provided it is still owned by the same national company that built it
- Damaged or useless foreign goods, provided that they are destroyed under customs control, before customs clearance, with no costs to the National Treasury
- Foreign goods on transit between customs units that are accidentally destroyed
Goods re-entering Brazil are exempt from Import Duty in the following cases:
- Goods sent on consignment and not sold within the authorized deadline
- Goods returned due to technical malfunction, for repair or substitution
- Goods returned due to changes in the importing legislation of the importing country
- Goods returned due to war or public disaster
- Goods returned due to all other reasons beyond the exporter’s control
Furthermore, the entry in Brazil of goods under the following conditions are not considered for Import Duty:
- Fish captured outside of Brazilian territorial waters, by a Brazilian company, provided that the company follows the requirements set by the Brazilian legislation
- Goods subject to the Regime Especial de Exportação Temporária, which is Portuguese for Special Temporary Export Regime
Products imported to Brazil that have an overall value of less than USD 50 are exempt from Import Duty.
Finally, it is necessary to mention that, despite some products not being legally exempt from the II, their Import Duty rate may be 0%.
The II in Brazil is calculated based on the CIF value of the goods. This is because Brazil is part of Mercosul and has to act according to regulations when trading internationally.
Tax Rates for Import Duty
Another consequence of Brazil being part of Mercosul is that it has unified its II rate with that of other countries, thus creating a Tarifa Externa Comum, which is Portuguese for Common External Tariff, TEC. Thus, Brazil applies TEC to all its imports. II rates can be calculated for each product in our tax index.
Brazil also operates a “Simplified Tax Regime” where imports by post or courier with values between USD 50 and USD 3.000 are subject to 60% Import Duty over the CIF value of the imported goods.