Import of Paper to Brazil
Although Brazil is one of the world’s leading producers of pulp and paper, the national industry still has to import paper for specific purposes. In this article, we will learn how to import paper to Brazil.
Different types of paper
Imports of paper fall in two different categories in Brazil:
- Immune paper
- Commercial paper
These two categories are defined by their destination. All paper that is destined to be used in the printing of books, newspapers, periodicals and other similar finished products is defined at immune paper. In addition, all the goods that are destined to be used in the making of these reading materials are also defined as immune paper, particularly the paper used for printing, and also the boxes used to make the packaging for transporting these reading materials.
Special tax treatment is given to immune paper, as it is exempt from paying import taxes. This measure was taken by the Brazilian government, upon the creation of its constitution in 1988, in order to stimulate culture, reading and the freedom of expression in the country. Immune paper must be labelled and controlled by its producers, importers, distributors and buyers. More than that, its use must be controlled and restricted to the printing of books, newspapers and periodicals.
Given the special tax treatment that is given to immune paper, it must always be separated from the other type of paper, commercial paper. Immune paper must be labelled and controlled by its producers, importers, distributors and buyers. More than that, its use must be controlled and restricted to the printing of books, newspapers and periodicals.
In contrast to immune paper, commercial paper is submitted to the regular import process. It is paper destined to be sold in reams, for writing or for the printing of printed advertisements.
Registering as a Company trading Immune Paper
As the tax benefits for immune paper are sought after by importers, many are willing to fake the destination of the imported paper in order to benefit from these special conditions. In order to counter this, the state of São Paulo launched in 2009 a Special Register in order to track and register who is allowed to import immune paper.
RECOPI, which in Portuguese stands for Recognition and Control System for Operations with Immune Paper, was created in order to make sure that imported immune paper is being used for the making of reading materials and not being sold as normal commercial paper. In 2012, the national consumption of immune paper was 500.000 tons, but more than 700.000 tons of immune paper were imported with tax benefits.
The national RECOPI is managed by the Receita Federal do Brasil, which is Portuguese for Federal Revenue Service, and was instituted in 2014, with 10 states being part of it:
- Distrito Federal
- Minas Gerais
- Rio de Janeiro
- Rio Grande do Sul
- Santa Catarina
- São Paulo
RECOPI only accepts applications from companies operating in the following economic activities, provided that the finished products are not exclusively composed of commercial advertisements:
- Paper manufacturer
- Newspaper company or publisher who operates in the book, newspaper or periodicals industry
- Paper importer
- Paper distributor
RECOPI applications must be submitted at the nearest Federal Revenue Service office, with the following documentation:
- Company name and address
- CNPJ number
- Notarized copy of articles of association or bylaws
- Description of economic activity, as stated in the last paragraph
- List of directors, managers and/or partners along with their CPF number
Companies registered with RECOPI must submit to the Federal Revenue Service every three months a Declaration stating how much immune paper was traded by that company. This Declaration is called DIF-Papel Imune, which stands for Special Declaration of Information Relating to the Control of Immune Paper.
Tax Benefits for Immune Paper
Immune paper enjoys total exemption from the following taxes:
- II, which stands for Import Duty
- IPI, which stands for Tax on Industrialized Products
- ICMS, which stands for State Tax on Circulation of Goods and Services
The exemption of COFINS and PIS/PASEP is not guaranteed by the Brazilian Constitution, but was created in 2004. This exemption would last for four years, but would be terminated if the Brazilian paper industry would be able to manufacture more than 80% of the internal consumption of immune paper. Since this not happened, this additional tax exemption has been renewed every four years, and is now valid until April 2016. If, when the new deadline is reached the Brazilian paper industry production of immune paper does not reach 80% of internal consumption, the additional tax exemption will be renewed again.
The difference in the tax burden between immune and commercial paper is 35%.
Necessary documentation and procedures
Before importing any product to Brazil, the importer needs to be registered with Siscomex, which is the Brazilian Foreign Trade Integrated System, where all foreign trade operations are registered and tracked by the Federal Revenue Service.
An Import Declaration has to be registered with Siscomex before the imported products are loaded abroad. In order to get an Import Declaration, the following documents need to be presented:
- Original bill of lading
- Original commercial invoice signed by the exporter
- Packing list where applicable
Paper is not subjected to a special import authorization by the Brazilian Government prior to loading abroad. Thus, the importer does not need any additional documentation for the import of paper in cases of import of commercial paper.