The ex-tarifário is an important tool in Brazil’s international trade, designed to support the country’s industrial and technological progress by temporarily lowering or removing import duties on certain goods that are not produced locally, such as capital, computer, and telecommunications equipment.
Its significance is in its capacity to drive the modernization of Brazil’s industrial sector, lower manufacturing expenses, and enhance the competitiveness of domestic firms in the international marketplace.
Companies, lawyers, and tax advisors must be informed about the new rules to benefit from them and prevent unexpected issues amid the planned changes for the new year.
This article will examine the ex-tariff comprehensively, covering its definition, historical development, recent modifications introduced by Resolution GECEX 512/2023, and the outlook for 2025.
What does Ex-Arif refer to?
The ex-tariff is a special provision in the tariff tables used in Brazil and Mercosur nations. It permits a decrease or elimination of import duties on capital goods, computers, and telecommunications equipment that are not produced domestically.
The former Farmer was established by Law No. 10.637/2002 and governed by Decree No. 6.759/2009 with the primary goal of enhancing the Brazilian industry through modernization, cost reduction, and boosting the competitiveness of local firms.
How can the ex-tariff be obtained?
The Foreign Chamber of Commerce (CAMEX) is responsible for granting ex-tariff awards through decisions made by its Executive Secretariat (GECEX).
For a product to receive benefits, it must meet certain requirements, including being unique nationally and demonstrating that its import will provide economic and technological advantages to the country.
Establishment of the ex-tariff and its surrounding circumstances
The ex-tariff was established in 2002 within the framework of an ever-evolving globalized economy.
Since then, there have been various alterations in both its regulation and its practical implementation.
Decree No. 6.759, issued in 2009, consolidated the regulations of the ex-tariff, setting out specific guidelines for its approval.
Over time, the ex-tariff in Brazil has been adjusted to meet the requirements of the local industry by adding new items and removing those that are now manufactured domestically.
Resolution GECEX 512 in 2023 introduced notable modifications, including shifting the emphasis from the previous applicant’s locker to the product and mandating the submission of organized projects.
Ex-employee and LETEC gain a better understanding of the topic.
The LETEC is a tool designed to regulate the export of sensitive items and technologies, including weapons and military equipment.
The ex-tariff is linked to LETEC when goods eligible for the ex-tariff are utilized in making LETEC products.
The applicant for the ex-tariff must demonstrate that the imported item will be used in compliance with LETEC regulations.
The connection between the two systems is crucial to prevent the misuse of the ex-tariff for illegal or against national interests purposes.
Ex-Arifário updates in 2025:
Some significant changes were made to the Ex-Tariff regime for 2025.
Explore the primary modifications.
Procedure for reducing tariffs in 2025
Procedures for approving the ex-tariff in 2025 are anticipated to be further simplified and digitized.
The process is increasingly being conducted online, with various government agencies like the Federal Revenue and CAMEX integrating their systems.
Likely, there will be increased transparency in how grants are awarded, including the release of specific guidelines and the establishment of communication channels between the government and applicants.
This will decrease the time spent on analysis and enhance process efficiency.
What products are eligible for duty exemption in 2025?
The authorized list of goods for the ex-Farmer in 2025 should meet the requirements of the Brazilian industry, with a focus on crucial areas like renewable energy, IT, and healthcare.
New products are anticipated to be added, particularly those associated with the shift to clean energy and the digital transformation of the economy.
Which items will be prohibited from receiving ex-tariff treatment in 2025?
Goods that have similar domestic products or do not meet the economic and technological benefit criteria should continue to be excluded from the workshop.
There is a growing emphasis on strict analysis of these criteria to safeguard the domestic industry and prevent market distortions.
Resolution GECEX 512/2023 and the Former Employee: Shift in interpretation due to §1 of article.
Resolution GECEX 512/2023 made an important discovery in §1 of Art. 2, stating that the ex-tariff should now be granted based on the product itself rather than the applicant.
This amendment seeks to guarantee that the benefit is utilized in a more effective and transparent manner, preventing misallocations and bias.
Until the introduction of this Resolution, there were conflicting interpretations in the Customs domain, aiming to enhance reader comprehension.
The line was based on the belief that the Ex was a privilege given to the company making the request.
Another interpretation recognized that the Ex was a privilege given to the deserving individuals mentioned in the shared narrative.
The common interpretation is that the Ex benefit is given to the product itself, not to the company using the product for its intended purpose.
Any company advocating for the import of the product may benefit from a reduction in the Import Tax.
In certain situations, it may be essential to argue this claim before certain Customs offices, where tax authorities are asserting that only the requesting company of the Ex would be entitled to the benefit.
Returning to what served to clarify the GECEX Resolution:
Former employee is now endorsing the product rather than the candidate.
As a result of shifting focus from the applicant to the product, the ex-tariff system becomes more objective and less vulnerable to external factors.
The benefit is given depending on the product’s features rather than the applicant’s specific details, aiming to improve fairness and effectiveness in the process.
Structured design presentation requirements for quality
Resolution GECEX 512/2023 introduced a new rule mandating the submission of a well-organized project for approval.
The project must provide specific information.
- How effectively it will be utilized.
- What economic and technological advantages are anticipated?
- It will help advance the country’s industry.
This rule aims to guarantee that the reduced tariff is utilized strategically and in alignment with the country’s interests.
Companies that provide products ready for consumption would be excluded as the door would be shut for them.
It must be a company with an industrialization project in Brazil.
Criticism of this requirement stipulated by the Resolution is already being voiced.
These criticisms suggest that industrial companies might be created solely to propose projects without any guarantee of effective supervision for their implementation.
I acknowledge the criticism and recognize the potential for adaptation within the Brazilian market, given its creativity in responding to legal regulations.
I believe that by implementing such a restriction, the Resolution is exceeding its authority as a lower-level norm in the regulatory legal framework.
One law can limit a law granted by another law.
Projections for exemptions granted by ex-tariffs in 2025.
An uptick in the amount of exemptions given through ex-tariffs is anticipated for 2025, particularly in key areas like renewable energy and information technology.
There is a growing tendency to be more selective in awarding benefits, prioritizing projects that genuinely support the advancement of the domestic industry.
How should lawyers and businesses get ready?
Lawyers and companies must develop strategies to maintain access to Ex-Tarifary and mitigate risks of inadequacy in light of these changes. Some recommendations include:
- Companies need to plan their orders ahead of time to prevent delays in receiving the benefit.
- It is crucial to conduct market research to demonstrate the absence of comparable domestic products, compiling thorough documentation and technical reports.
- Monitoring regulatory changes through keeping track of updates and collaborating with experts in tax and customs law can prevent potential issues in the future.
- Companies looking to benefit from tax incentives must comply with new sustainability standards to guarantee approval.
Opportunity or difficulty?
The ex-tariff is vital for the growth of the Brazilian industry, but its success relies on precise rules and a transparent, effective concession procedure.
The modifications introduced by Resolution GECEX 512/2023 represent a significant advancement, yet it is crucial for the government to persist in overseeing and refining the system to effectively cater to the requirements of advancing industry and the nation.
Lawyers play a critical role in advising clients on the most effective strategies and ensuring adherence to new regulations during this important period.
Keeping a close eye on updates and taking strategic actions will be crucial for individuals looking to leverage the Ex-Tarifary to their advantage.
References:
Law number 10,637 of 2002.
Decree number 6.759/2009.
GECEX Resolution 512/2023.
Studies and documents from CAMEX and the Federal Revenue are available.
Relevant teachings and legal decisions.
Frequently Asked Questions
What does the Ex-Tarifary Regime refer to?
The Ex-Tarifary is a system that permits a temporary decrease in the Import Tax for capital goods (BK) and computer and telecommunication goods (BIT) without a corresponding national measure.
What is the meaning of Letec?
Letec is short for “Common External Tariff Exception List” and is a tool within Mercosur that permits member nations to impose alternative rates for specific products compared to the Common External Tariff (TEC).
What does Ex-Tarifary exemption refer to?
The government temporarily lowers or eliminates the Import Tax on capital goods and computer and telecommunication goods that are not manufactured in Brazil.
How does the Ex-Tariff system function?
Companies can ask for a tax reduction from the government by demonstrating that the product they want to import does not have a Brazilian-made equivalent. If granted, the item will be imported with a lower tax rate or duty.
How can you determine if the item has an Ex-Tariff?
The inquiry can be conducted on the Ministry of Development, Industry, Commerce and Services (MDIC) website or the resolution database of Gecex (Camex Management Executive Committee).
What advantages does the Ex-Tariff regime offer?
- Cost reduction in importing machinery and equipment.
- Access to more sophisticated technologies.
- Brazilian companies are becoming more competitive.
- Promoting innovation and modernizing the industrial park.
What does BK (capital goods) refer to?
BK refers to capital goods, which are machinery and equipment utilized in the manufacturing of other products, like industrial machinery and large equipment.
What does Gecex resolution refer to?
How to dethrone a former ruler? How to contest a former ruler?
How can one request an Ex-Tariff classification?
What are BIT and BK?
Computer and telecommunication goods known as BIT, including network servers and equipment, and capital goods like industrial machinery and production equipment, referred to as BK, could receive benefits from the Ex-Tariff if there are no comparable national products.
