Overview

To look up duties and tariffs use, use the Customs Info Database tariff look-up tool, available on trade.gov (free registration required), to estimate duties and taxes. Imports are subject to several taxes and fees in Brazil, which are usually paid during the customs clearance process. 

There are four taxes that account for the majority of import costs:  

• Import Duty (abbreviated in Portuguese as II)
• Industrialized Product Tax (IPI)
• Federal Social Contribution Taxes (PIS/COFINS
• Merchandise and Service Circulation Tax (ICMS)

In addition to these taxes, several smaller taxes and fees apply to imports. Note: most taxes are calculated on a cumulative basis. On January 1, 1995, Brazil, and its Southern Common Market (Mercosur) partners, Argentina, Paraguay, and Uruguay, implemented the Mercosur Common External Tariff (CET). Each country maintains a separate exceptions list of items for tariffs. In 1995, Brazil implemented the Mercosur Common Nomenclature, known as the Nomenclature Comum do Mercosur (NCM), consistent with the Harmonized System (HS) for tariff classification.

Import Duty (II)

II is a federally mandated product-specific tax levied on a Cost, Insurance, and Freight (CIF) basis for imported goods, and is assessed during the customs clearance process.  

Industrialized Product Tax (IPI)

IPI is a federal tax levied on most domestic and imported manufactured products. It is assessed at the point of sale, in the case of domestically produced goods, and at the point of customs clearance in the case of imports. As part of the federal government’s efforts to support local producers, IPI rates differences between imported and domestically produced goods within the same product category may differ. The IPI tax is a pass-along tax, assessed at each sale point, and thus not considered a cost for the importer, since the value is credited back to the importer, when sold to the end-user.  

The GOB levies the IPI rate by determining how essential the product may be for the Brazilian end-user. Generally, the IPI tax rate ranges from 0-15 percent. In the case of imports, the tax is charged on the product’s CIF value plus import duty. A product’s IPI rate is directly proportional to its import tariff rate. As with value-added taxes in Europe, IPI taxes on products that pass through several stages of processing are reduced to compensate for IPI taxes paid at each stage. Brazilian exports are exempt from the IPI tax.

Social Contribution Taxes (PIS/COFINS)

PIS (Programa de Integração Social) is a federal contribution used to fund benefits for the workers, sucha s unemployment insurances. COFINS (Contribuição para Financiamento da Seguridade Social) is a federal contribution used to fund public health, social security, and welfare programs

Merchandise and Service Circulation Tax (ICMS)

ICMS is a state government value-added tax applicable to both imports and domestic products. The ICMS tax on imports is assessed ad valorem on the CIF value, plus import duty, plus IPI. plus PIS/COFINS . Although importers must pay the ICMS tax to clear the imported product through customs, it is not necessarily a cost item for the importer because the paid value represents a credit to the importer. When the product is sold to the end user, the importer debits the ICMS tax, which is included in the final price of the product and is paid by the end user.

Effectively, the tax is paid only on the value added; the tax is generally passed on to the buyer since it is included in the price charged for the merchandise. The ICMS tax due to the state government is based on taxes collected on sales by a company, minus the taxes paid in purchasing raw materials and intermediate goods. The ICMS tax is levied on both intrastate and interstate transactions and is assessed on every transfer or movement of merchandise. The rate varies among states but in most cases is between 17-19 percent. On interstate movements, the tax will be assessed at the rate applicable to the destination state. Some sectors of the economy, such as mining, electricity, liquid fuels and natural gas can be exempt from the ICMS tax. Most Brazilian exports are exempted.

The following chart is an example of the effective increase in costs due to the Brazilian import tariff, duty, and tax regime.

*Chart is for example only, not to be used for quotation. 

Ex-Tarifário (ex-tariff) Regime 

Brazil’s customs regime allows for tariff-exempt imports of foreign and U.S. manufactured goods under some circumstances. This tax reduction is called ‘Ex-Tariff’ or ‘Ex Tarifário.’ The main required conditions to qualify for the “Ex-Tariff” are:  

• the product cannot compete with a Brazilian-made similar product;  
• the product must be new (unused);  
• the program applies only to capital goods and ICT products;  
• the application must be made by a Brazilian company, or a foreign company that is duly established in Brazil;  
• all technical material and information brochures must be translated into Portuguese.  

Local companies may apply for this tariff exemption at the Brazilian Ministry of Industry, Foreign Trade and Services (MDIC) and the whole procedure takes normally 4 to 6 months. The application must specify the good in minute details, such as capacity, size, power, materials used, models, use purpose, feed rate, output rate, range of works, speed, etc; along with corresponding tariff code. If the product is to be imported with any accessories, all of them must be mentioned in the Ex-tariff application. The Government of Brazil makes the final determination on whether the good is eligible for the tariff exemption. It is advised to work with a local Brazilian specialist to assess the eligibility of the imported product.

Ex-Tarifário (ex-tariff) Regime 

Brazil’s customs regime allows for tariff-exempt imports of foreign and U.S. manufactured goods under some circumstances. This tax reduction is called ‘Ex-Tariff’ or ‘Ex Tarifário.’ The main required conditions to qualify for the “Ex-Tariff” are:  

• the product cannot compete with a Brazilian-made similar product;  
• the product must be new (unused);  
• the program applies only to capital goods and ICT products;  
• the application must be made by a Brazilian company, or a foreign company that is duly established in Brazil;  
• all technical material and information brochures must be translated into Portuguese.  

Local companies may apply for this tariff exemption at the Brazilian Ministry of Industry, Foreign Trade and Services (MDIC) and the whole procedure takes normally 4 to 6 months. The application must specify the good in minute details, such as capacity, size, power, materials used, models, use purpose, feed rate, output rate, range of works, speed, etc; along with corresponding tariff code. If the product is to be imported with any accessories, all of them must be mentioned in the Ex-tariff application. The Government of Brazil makes the final determination on whether the good is eligible for the tariff exemption. It is advised to work with a local Brazilian specialist to assess the eligibility of the imported product.