Brazil: PIS and COFINS Tax on imported Goods

Imported products are subject to the PIS-imports and COFINS-imports tax which has to be paid by due by the company importing foreign goods or services from abroad.

 

What products and services trigger the Tax?

Foreign goods and services include exported national or nationalized goods, which return to the Country, unless they have

  • Been sent on consignment and not sold within the authorized period
  • returned for repair or replacement due to technical defects
  • returned due to changes in the import system by the importing country
  • returned for reasons of war or public calamity
  • have returned because of other factors beyond the will of the exporter

 

What products and services do not trigger the Tax?

  • foreign goods that, correctly described in the transport documents, arrive in the country by error of shipment and that are re-destinated or returned abroad
  • identical foreign goods, in equal quantity and value, and intended for replacement of others previously imported that have been found, after customs clearance, defective or useless for their intended purpose
  • foreign assets that have been subject to the penalty of forfeiture, except in cases in which they are not located, have been consumed or resold
  • foreign goods returned abroad before the registration of the import declaration
  • fish caught outside the territorial waters of the country by a company located in its territory, provided that the requirements that regulate the fishing activity are met
  • goods to which the temporary export scheme has been applied
  • goods or services imported by social assistance beneficiary entities
  • goods in transit through customs, accidentally destroyed
  • the cost of international transportation and other services, which have been computed in the customs value that served as the basis for calculating the contribution
  • amount paid, credited, delivered, employed or remitted to an individual or legal entity as remuneration for services related to conformity assessment, metrology, standardization, sanitary and phytosanitary inspection, approval, records and other procedures required by the importing country, under the protection of the agreements on sanitary and phytosanitary measures (SPS) and technical barriers to trade (TBT), both under the scope of the World Trade Organization

 

Reduction of PIS and COFINS import taxes has to zero

The following products fall under PIS and COFINS import tax but their rates have been reduced to 0%:

  • materials and equipment, including parts, pieces and components, intended for use in the construction, conservation, modernization, conversion or repair of vessels registered or pre-registered in the Brazilian Special Register
  • vessels built in Brazil and transferred by matrix of a Brazilian shipping company to a wholly owned subsidiary abroad, which return to Brazilian registration as the property of the same national company of origin
  • paper intended for printing newspapers, for a period of four years from the effective date of this Law, or until national production meets 80% of domestic consumption
  • machines, equipment, appliances, instruments, parts and spare parts, and blank film of a national kind, intended for the film and audiovisual and broadcasting industry
  • aircraft, classified under heading 88.02 of NCM
  • parts, pieces, tooling, components, inputs, hydraulic fluids, lubricants, paints, anti-corrosives, equipment, services and raw materials to be employed in the maintenance, repair, overhaul, conservation, modernization, conversion and industrialization of the aircraft
  • natural gas intended for consumption in thermoelectric units that are part of the Thermoelectric Priority Program – PPT
  • certain vegetables and fruits
  • Semen and embryos of heading 05.11 of the NCM
  • Books
  • non-alcoholic compound preparations
  • military employment equipment
  • parts, pieces, components, tooling, inputs, equipment and raw materials to be used in the industrialization, maintenance, modernization and conversion of military employment
  • liquefied natural gas
  • products classified under heading 87.13 of the Common Nomenclature of Mercosur – NCM
  • Orthopedic or fracture articles
  • Projectors for cinematographic exhibitions
  • voice synthesizer-equipped calculators
  • Keyboards with specific adaptations for use by persons with disabilities
  • Products for disabled people

 

Which institutions are exempt from the import taxes?

  • The Brazilian Union, States, Federal District and Municipalities, their autarchies and foundations established and maintained by the public power
  • Permanent Diplomatic Missions and Consular Offices and their members
  • Representations of permanent international organizations, including those of a regional scope, of which Brazil is a member, and their respective members

 

Furthermore, goods and services related to the following concepts are exempt from the import taxes:

  • international postal samples and consignments, without commercial value
  • international postal parcels and parcels to individuals
  • baggage of foreign travelers and imported goods to which simplified or special taxation regimes apply
  • goods purchased in a duty free store in the country
  • goods brought from abroad, in the characteristic trade of cities located on land borders, intended for the subsistence of the family unit of residents of Brazilian border cities
  • goods imported under the special drawback customs regime
  • Art objects, classified under CNM headings 97.01, 97.02, 97.03 and 97.06, received as donations by museums established and maintained by the government or other cultural entities recognized as of public utility
  • machinery, equipment, apparatus and instruments, and parts and spare parts, fittings, raw materials and intermediate products, imported by scientific and technological institutions and by scientists and researchers

 

These regulatory changes could affect your business with view to customizing or support of your ERP/SAP system. Please contact us to learn about possible necessary reactions to the changes – we are happy to assist you!