sábado, 4 de maio de 2013

Exemption of import tax for machinery - Import permits for electronics and drugs

Note: You may also want to see How to calculate Brazilian Import Costs.

A couple months ago, I have been invited by the American Chamber of Commerce to present a panel on the most frequent problems regarding import procedures. 

The panel was very busy, as the audience contributed with lots of questions. 

I was trying to reproduce the whole event in a post, but I decided to list only the main topics. Here we go 

EX-Tarifário (Exemption of import taxes)

Advanced machinery that is not produced in Brazil and that can be considered a capital investment (microchips assembly lines are OK, the new Google glasses are not) may be imported with a substantial reduction of the Import Tax. 
I really meant the Import Tax, called II. Other taxes applicable over imports will still be applicable. 

WOW, tax breaks? Where do I sign?

Ex-tarifário is used very little in Brazil. Extremely little, I would say, considering that our industrial sector is far from the technological edge. 
One of the reasons is that it is not an automatic exemption, but rather a specific concession that must be granted by the government upon request of the importer. 
During the lecture, the other panelists and I have criticized this system a lot. Mainly because it takes a lot of time to obtain an exemption. Usually 6 to 12 months. 
This is because the procedures involve consultations with Brazilian producers, in order to confirm if the goods do not have a Brazilian similar one (Brazilian producers tend to be very broad on their interpretation of similar).

The States in Brazil can also grant tax exemptions for special machinery. Since the state VAT is one of the heavier taxes applicable over any import, this benefit should be pursued  by all importers. 

Temporary imports

Construction machinery, planes and other equipment may be imported on a temporary basis, with partial payment of import taxes. 
This kind of import also requires previous approval, that usually demands 3 months to be granted. 
Some companies will make a temporary import while the request for tax exemption is being processed. 

Regulatory Agencies and import permits, 
Many products need previous approval before being imported into Brazil. In some cases, the approval must be obtained before the goods are shipped abroad. 

For example: 
Medicines, cosmetics and food products must be previously approved by ANVISA; 
Electronic products, including cell phones and wireless devices, must be approved by ANATEL
Several consumer products, like toys, helments and condoms must be approved by INMETRO. 

Many exporters and even Brazilian companies do not know about it, and incur great losses when the goods are retained by customs. 

Please note that only Brazilian residents or Brazilian companies can handle the agencies' approval and the importation procedures, including the licensing of special products. 

This means that you must either assign a Brazilian partner to take care of the import licensing and customs clearance in your place, or you must incorporate a Brazilian company in order to do it yourself.

Of course, you can also sell directly to a local buyer. In this case, the local buyer must take care of the import procedures.

Approval procedures from the agencies mentioned above vary immensely. Some products need only be registered, while other (specially electronics and medicines) need to go through expensive tests. 

I will write more about it later.  

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