Brazilian government boosts the benefits applicable under the drawback regime

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Brazilian government boosts the benefits applicable under the drawback regime

Sponsored by

logo.png
brazil-4809011.jpg

Gabriel Caldiron Rezende of Machado Associados discusses the measures taken by the Brazilian federal government to increase the benefits for exporters.

On September 5 2022, the Brazilian government issued Law 14440/2022, which provided for the inclusion of certain services in the suspension drawback regime as of January 1 2023.

The drawback customs regime aims to boost the export of Brazilian manufactured products by exempting the acquisition of inputs used in the manufacturing of products to be exported, thus reducing the manufacturing costs. As a rule, the drawback regime is granted under the suspension and exemption modalities, as follows:

  • The suspension drawback allows the suspension of the payment of import duty (II), excise tax (IPI), social contribution on revenues (PIS and COFINS), and social contribution on imports of goods and services (PIS-Import and COFINS-Import), combined or not with the acquisition, in the domestic market, of goods to be used or consumed in the manufacturing of the product to be exported. A state VAT (ICMS) exemption also applies, but only to imports.

  • The exemption drawback allows an exemption from II and a reduction of IPI, PIS, COFINS, PIS-Import and COFINS-Import on imports to zero, combined or not with the local acquisition of goods equivalent to those used or consumed in the manufacturing of the exported product. No ICMS benefit is applicable.

Although the drawback regime provides for a tax reduction on the acquisition of goods, it is a benefit that aims at relieving the tax costs of the manufacturing of goods for exports, thus actually being a benefit for exports.

The benefit only applies to the acquisition of goods, not services.

With the changes brought by Law 11440/2022, as of January 1 2023, it will be possible to acquire certain services, in the domestic market and from abroad, directly and exclusively linked to the export of products resulting from the use of the suspension drawback regime with the suspension of PIS, COFINS, PIS-Import and COFINS-Import.

The suspension of PIS/COFINS and of PIS/COFINS-Import will apply to the following services:

  • Intermediation in the distribution of goods abroad (agent commission);

  • Cargo insurance;

  • Customs clearance;

  • Goods storage;

  • Road, rail, air, waterway, or multimodal cargo transportation;

  • Cargo handling;

  • Container handling;

  • Cargo unitisation or de-unitisation;

  • Cargo document consolidation or deconsolidation;

  • Freight transportation agency;

  • Express remittance;

  • Cargo weighing and measurement;

  • Cargo refrigeration;

  • Operating lease or lease of containers;

  • Installation and assembly of exported goods; and

  • Training for the use of exported goods.

The expectation is that, with this measure, exports will be boosted, and the Brazilian economy will recover even better from the COVID-19 pandemic.

more across site & shared bottom lb ros

More from across our site

E-invoicing is currently characterised by dynamism, with fragmentation acting as a key catalyst for increasing interoperability, says Aida Cavalera of the International Observatory on eInvoicing
Pillar two and the US tax system ‘could work in harmony’, Scott Levine tells ITR in an exclusive interview to mark his arrival at Baker McKenzie
Peter White, who has a tax debt of A$2 million, has been banned for five years from seeking registration with Australia’s Tax Practitioners Board (TPB)
Wopke Hoekstra’s comments followed US measures aimed against ‘unfair foreign taxes’; in other news, Grant Thornton and Holland & Knight made key tax partner hires
An Administrative Review Tribunal ruling last month in Australia v Alcoa represents a 'concerning trend' for the tax authority, one expert tells ITR
A recent decision underlines that Indian courts are more willing to look beyond just legal compliance and examine whether foreign investment structures have real business substance
Following his Liberal Party’s election victory, one source expects Mark Carney to follow the international consensus on pillar two, as experts assess the new administration
A German economics professor was reportedly ‘irritated’ by how the Finnish ministry of finance used his data
Countries that care about the fair taxation of tech multinationals and equitable global distribution of wealth should back the UN’s tax framework, writes economist Abdelmalek Riad
The cuts disproportionately affected staff in certain positions, the report also found; in other news, MHA announced the €24m acquisition of Baker Tilly South East Europe
Gift this article