Brazil - Temporary EntryBrazil - Temporary Entry
The GoB became the third country in Latin America to officially accept ATA Carnets in 2017. The Carnet is an international customs document and temporary export-import document, which allows the holder to avoid import duties for goods that will be re-exported within one year. Prior to Brazil’s participation in the ATA Carnet program, U.S. exhibitors faced extreme difficulties and delays in clearing temporary imports and frequently wrote-off the imports as a complete loss. The ATA Carnet will significantly ease customs clearance procedures for U.S. exhibitors in Brazilian trade shows.
Since 2000, the GoB has made an allowance for temporary importation of products that are used for a predetermined time period and then re-exported. Brazil has already ratified the International Convention for the Temporary Admission of Goods. Under Brazil’s temporary import program, the II and IPI are used to determine the temporary import tax. Products must be used in the manufacture of other goods and involve payment of rental or lease fees from the local importer to the international exporter.
Under Brazil’s temporary import program, the Import Duty (II) and Industrialized Product tax (IPI) are used to determine the temporary import tax. Products must be used in the manufacture of other goods and involve payment of rental or lease fee from the local importer to the international exporter.
There are very strict rules regarding the entry of used merchandise into Brazil. An example of products falling under this program would be the temporary importation of machine tools. The example in the table below shows that taxes due are proportional to the period the imported product will remain in Brazil. This also applies to temporary entry of personal belongings.
|Permanent and Temporary Tax example - Brazil|
|CIF price of machine tool||$200,000|
|II of 10% on CIF||$20,000|
|IIPI of 5% X (CIF plus II)||$11,000|
|Taxes that would be owed if importation were permanent||$31,000|
|Total life span of machine tool||60 months|
|Time machine tool with stay in Brazil||12 months|
|Tax for temporary importation||$6,200|
|Value =31000 X (I-(60-12)/60)|
|(20% of tax is owed as tool will stay in Brazil 1/5 of it’s useful life)|
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