Import Taxes in Brazil Can Add Up

It’s that time of the year again. If you're sending gifts to friends in Brazil, expect to get hit with taxes. And lots of them. Unless you can fit the goods you're sending into one of the few categories of items that are exempted, your recipient will be forced to send a “gift” too - to the Brazilian government, that is.

Brazil exempts from import taxes goods entering the country with an import value that doesn’t exceed US$50. But there are a couple caveats. First, both the sender and the receiver must be individuals rather than companies. Second, the US$50 limit includes not only the value of the goods but also the cost of shipping and insurance. Good luck sending anything to Brazil for less than US$50.

You might as well expect to pay taxes and lots of them. Goods with customs values up to US$3,000 are subject to a flat tax rate of 60%. It’s sky high, but this simplified tax regime (Regime de Tributação Simplificada) makes the importation process a whole lot easier. It’s one single payment to one governmental agency with a tax that’s straightforward to calculate.

Outside of the simplified system, goods imported into Brazil are generally subject to at least three different taxes: the federal import duty, federal contributions of PIS and COFINS, and state ICMS tax. After you spend hours upon hours trying to figure out the effective tax rate, that 60% flat tax might not sound so bad after all.