BRAZIL TAX ON GOODS IMPORTED BY SEA

The Brazil Tax on Goods Imported by Sea, in Portuguese: Adicional ao Frete para Renovação da Marinha Mercante, abbreviated (AFRMM) is a social contribution, charged by the shipowner of any vessel operating in a Brazilian Port and it’s administered by Federal Revenue Services in Brazil. It was created to attend the costs of the intervention of the Union. And to support the merchant navy and Brazilian shipbuilding and repair industry. It is a part of the basic source of the Merchant Marine Fund.

Most of all, the tax event of this duty is the beginning of the discharging of the products in the Brazilian Port, that may be in long course navigation (coming from abroad) or navigation between Brazilian ports, in cabotage, river or lake navigation.

THIS DUTY HAS A FIXED TAX FOR EVERY KIND OF TRANSPORT, AS BELOW:

25% to long navigation,
10% to cabotage navigation and
40% to river and lake navigation

SOME IMPORTED GOODS ARE EXEMPT FROM THE BRAZIL TAX ON GOODS IMPORTED BY SEA:

Travelers luggage;
Books, newspapers and periodicals, as well as paper for this printing;
Goods donated to philanthropic entities or entering the country to participate specifically of cultural or artistic events;
Goods for scientific and technological research;
Imported goods replacing identical ones, because they have been defective or useless.

The basis of calculation of the Brazil Tax on Goods Imported by Sea is the freight value of the goods, plus to possible port taxes and other expenses, informed in the bill of lading. When international freight is charged in foreign currency, the amount of money is converted to Brazilian Real on the day of the payment of the tax, based on the exchange information of the Central Bank of Brazil Information System and the payment is done in the Merchant System.

EXAMPLE

Considering the importation of a car with value of R$ 20.000,00, with an international freight of R$ 5.000,00, the calculation of the Brazil Tax on Goods Imported by Sea should be:

AFRMM = Freight Value x Tax Rate So it is 5.000 X 25% and in total it is R$ 1.250,00

Therefore, we can see the operation and purpose of the AFRMM collection. The complete Brazilian Federal Revenue manual is available in Portuguese at this link.

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