Taxation

Foreign-controlled companies and foreign residents generally receive the same treatment with taxation in Brazil as local companies and residents.

The Industrialised Products Tax (IPI) is levied on most goods and is applied on the duty-paid value. The most common rate is between 10 per cent and 20 per cent, assessed on the duty-paid value. However, certain goods, such as alcoholic beverages are subject to rates of up to 150 per cent (tariff 20 per cent + IPI 130 per cent).

Merchandise and Services Circulation Tax is also levied and varies from state to state. In Sao Paulo, for example, it is 18 per cent levied on the aggregate of the duty-paid value plus the IPI.

Merchant Marine Commission of 25 per cent of freight cost.

Warehousing charges begin at one per cent for five days and increase progressively up to 1.5 per cent for each period of 10 days after 20 useful days of storage.

Port and dock charges vary based on the types of goods and their FOB value (Incoterms 2000), rates range from three per cent to 12 per cent.

SISCOMEX Fee: fixed fees in local currency (Reals) for each import declaration, averaging US$20. A bank charge must be paid at the Bank of Brazil. The rate averages US$50.

Clearance agent's charge of two per cent, levied on the CIF value (Incoterms 2000).

Bank fees covering letter of credit emissions and document handling may reach three per cent of the FOB price.

Imports into the Free Trade Zone of Manaus (State of Amazonas) are exempt from import duty.