Brazil – Ministry of External Relations
III.6.3. Tax on Industrialized Products (IPI) The Tax on Industrialized Products (IPI) is an indirect federal tax that is levied on the goods listed on its application table – TIPI, which is based on the Mercosur Common Nomenclature (NCM), regardless of whether the industrialization process occurred within the country’s borders or abroad. The levying of this tax is justified by the need to promote an equalization of costs between imported industrialized products and products manufactured nationally. The IPI follows the principle of non-cumulativity. Thus, the value paid at the time of import is credited by the importer for subsequent compensation of the tax due in future operations that they may perform and that are subject to that same tax. The IPI also follows the principle of selectivity. In other words, the tax burden is different in consequence of how essential the product is, so that the rate may drop to zero for the more essential products. The calculation basis for the IPI is the customs value of the merchandise plus the Import Tax (II) value, Some products in chapters 21 and 22 of the NCM (beverages) are subject to the tax per unit or per amount of product, depending on the case. The tax is calculated by applying the rates set in the TIPI over the calculation basis. In almost all cases, the IPI rate is ad valorem and the tax due is equal to: IPI = TIPI (%) x (Customs Value (CV) + II)
III.6.4. PIS-Import and Cofins-Import The Cofins-Import and PIS-Import are indirect federal social contributions to fund social security, and are levied on the import of foreign products. These contributions give isonomic fiscal treatment to the goods produced in the country, which are liable to these contributions, and to imported goods, which are taxed at the same rates as the national goods. These social contributions also follow the principle of non-cumulativity. Therefore, the value paid at the time of import can be credited by the importer for subsequent compensation of the contributions due. In almost all imports, the rate applied for PIS is 1.65% and for Cofins, 7.6%. The calculation basis for both contributions is the customs value (CV) of the imported goods, plus the value of the Tax on the Distribution of Goods and Services (ICMS, see section II.6.6), levied on imports, and the value of the contributions themselves, as these are included in the final price of the goods (recursive5 calculation). Thus, the ontributions follow these formulas: PIS = PIS rate x (CV + ICMS + PIS + Cofins) Cofins = Cofins rate x (CV + ICMS + PIS + Cofins) 5
Calculation method in which the variable searched is also part of the formula to calculate it.
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