General Tax Treatment for Imports – Part II
The applicable tax treatment for Brazilian imports includes the Import Tax (Imposto de Importação – II) as well as a number of additional levies assessed to products sold on the domestic market, with a view to ensuring goods produced in Brazil receive equal treatment.
Additional Freight for the Renovation of the Merchant Marine (Adicional ao Frete para Renovação da Marinha Mercante – AFRMM)
The AFRMM is a federal social contribution for intervention in the economic domain assessed on the value of international freight or cabotage and aimed at providing resources to support the government’s efforts to develop the Brazilian merchant marine and shipbuilding and repair industry.
The additional freight is assessed on a percentage of the port-to-port water transport service, including port and other expenses listed on the bill of lading. Additional freight rates vary according to the type of navigation:
- 25% for long-course navigation;
- 10% for cabotage navigation; and
- 40% for inland and river navigation.
The AFRMM is not assessed on freight originating in the Member States of MERCOSUR and those included under international agreements signed by Brazil that expressly waive the additional freight charge, such as the Economic Complementation.
SISCOMEX Use Fee
Aimed at covering the Import Declaration registration costs on the Integrated Foreign Trade System – SISCOMEX. The fee varies according to the CNM classification number under which the Import Declaration is registered.
Created to reduce the Import Tax on capital goods and computer and telecommunications equipment for which a domestically produced equivalent does not exist or which is in short supply, and, additionally, the import of which the government has an interest in promoting.
The mechanism provides for a reduction of the Import Tax to 2% for a period of up to two years, provided the absence of sufficient domestic production is demonstrated.
Modification of the Import Tax rate and the respective publication of a corresponding “ex-tariff” applies to goods listed under the CET as capital goods or computer and telecommunications equipment, including parts and components, for which a domestically produced equivalent does not exist.