BRAZILIAN FEDERAL EXCISE TAXES ON MANUFACTURED GOODS

First of all, there are three main taxes imposed on imports. And these are usually paid at customs clearance. These are: Import Duty (II), Brazilian Federal Excise Taxes on Manufactured Goods, in Portuguese: Imposto Sobre Produtos Industrializados –abbreviated (FETMN) also known as the Industrialised Product Tax, in Portuguese: Imposto sobre Produtos Industrializados – abbreviated (IPI) and Tax on Circulation of Goods and Transportation and Communication Service, in Portuguese: Imposto sobre Circulação de Mercadorias e Serviços – abbreviated (ICMS). These taxes are paid on a cumulative basis.

THE BRAZILIAN FEDERAL EXCISE TAXES ON MANUFACTURED GOODS IS THE INDUSTRIALISED PRODUCT TAX (IPI)

This is a federal tax imposed on manufactured goods coming into the country from abroad and the amount is determined by the type of product and the tax rate associated with it. Furthermore, this is written in a “Duty Chart” which shows the tax liable on each type of product. It has the long name of “Table of Incidence of Tax on Industrialised Products” or TIPI. Some basic goods have zero charge, for example; foods, including fruit and meat. Its important to note that the charges are liable to change as the demand for certain products fluctuates.

WHAT IS A ‘MANUFACTURED PRODUCT’?

The Brazilian Federal Excise Taxes on Manufactured Goods defines the ‘manufactured product’ as any good which have been subjected to an industrial process, even incomplete, partial or intermediate. The industrial process may change the nature, operation, finish or purpose of the products, or make them fit for consumption.

EXPORTS FROM THE UK TO BRAZIL

The main products manufactured by the UK are: machines, cars, pharmaceutical products, home appliances (like TVs, fridges, etc.), aeroplanes and organic chemicals.

BRAZIL REQUIRES THESE PRODUCTS BECAUSE

Brazil wants to keep the Brazilian market competitive.
Natural resources in the UK differ from those in Brazil.
Technology developments in the UK differ from those in Brazil.
The need for diversity of products in all market segments.

EXAMPLE OF CAR EXPORTATION FROM UK TO BRAZIL

Car value R$10,000.00
Import Duty 35%
Federal tax rate – according to the Duty Chart 13%

THE CALCULATION IS AS FOLLOWS

Brazilian Federal Excise Taxes on Manufactured Goods = Tax Rate x (Custom Value + Import Duty)

Import Duty = Tax Rate x Custom Value
Import Duty = 35% x 10.000
Import Duty = R$ 3.500,00

SO, THE CALCULATION FOR THE BRAZILIAN FEDERAL EXCISE TAX ON MANUFACTURED GOODS SHOULD BE:

Brazilian Federal Excise Taxes on Manufactured Goods = 13% x (10.000 + 3.500)
Brazilian Federal Excise Taxes on Manufactured Goods = 13% x 13.500
Brazilian Federal Excise Taxes on Manufactured Goods = R$ 1.755,00.

ADDITIONAL INFORMATION

The time limit for paying this tax is 25 days, but for cigarettes just 10 days (with a rate of 300%, to discourage their import!)

Some products are excepted from this tax, for example: newspapers, books, printing paper and gold.
Sometimes the Brazilian Government can increase or decrease the charge of this duty, hence they can increase or decrease the demand for those products. And for example, if the government wants to stimulate the sale of cars, they exempt the IPI or reduce it significantly, and the opposite may also happen.

CONCLUSION

The Brazilian Federal Excise Taxes on Manufactured Goods is also known as The Industrialised Product Tax (IPI). The rate depends upon the type of goods imported and the current rate of tax according to the TIPI.

REFERENCES (IN PORTUGUESE)

REFERENCES (IN ENGLISH)

Visit Shipping Brazil for more information.

OUR PROMISE: