Continuing the previous text, we elaborated a kind of guide covering the aspects that involve the importation of machines and equipment for the Brazilian industry, demonstrating their particularities and sharing some “tricks”, to say so.
Follow us below to stay on top of this important theme of Brazilian Foreign Trade.
What is Import?
According to the RFB, importation is any entry, temporary or definitive, into national territory, of goods or services originating or coming from other countries, whether for a fee or free of charge.
It seems simple, but it covers a lot around it: who is buying, who is selling, what product is being negotiated, who is performing services such as international freight, nationalization, etc.
A “simple” import involves a vast chain of consentors, stakeholders, negotiators and, of course, the object in question.
For this reason, the planning of the procedures for an Import is very important, so this guide will help you to have an overview of how the import of machinery and equipment works.
What is the importance of importing?
Different countries have different vocations. Importation gives us the possibility to take advantage of what each country has to offer, from raw materials and basic inputs to high-tech machinery. We can buy what each country does best and increase our competitiveness.
Access to the latest technology and the diversity of products at lower cost makes importing companies more competitive, further increasing their growth capacity and adding to economic gains for the country.
Why import machinery and equipment?
We live in an extremely connected world, which is why it makes no sense to limit the purchase of equipment to national borders. It is perfectly possible to search for machines outside the country, which can add to technological differences and financial economics, since the goods can be cheaper than those found in the national industry.
What are the types of machine imports?
When thinking about importing machines, two forms of operation can be considered: Imports by temporary admission and Definitive Imports.
Import by temporary admission is done when the importing company initially intends to test a machine or when there is already a plan to use the machine only during a period with pre-established start and end dates. The company imports, but is not obliged to pay the nationalization taxes in full, since the good can be exported back to the country of origin after the end of the period in question.
If so desired, the company may, instead, choose to pay full taxes and nationalize the asset permanently - this usually happens when the tests are successful and the company approves the machine.
Definitive Import is done when the importing company intends to import and integrate the machinery at once. It must pay full taxes and nationalization expenses at the time the goods arrive in the country, and will issue the invoice for entry of the machine, which characterizes the end of the import operation.
Who can import industrial machines?
Technically, those who have RADAR (the Brazilian authorization to import and export) can import industrial machines.
In addition, there are no restrictions on importing new machinery. What there is, sometimes, is the need for a deferred LI (Import License) in order for the import to be authorized.
That is, by doing the proper planning, any company can import machinery and equipment, both for resale and for consumption.
What is needed to import machines?
After qualification at RADAR, customs brokers are registered who will be responsible for the nationalization procedures in a specific system, called Siscomex.
In parallel, the importing company defines the foreign supplier and makes the necessary validations to guarantee a smooth import. It is often advisable to hire a specialized company in the country of origin to make an in-depth analysis on the suitability of the supplier. Only with prior approval is it indicated to effect the international payment.
How is the process of importing machines in Brazil?
After the commercial negotiations and the qualification to act in the importing company's foreign trade, the procedures for the import operation begin.
International freight and insurance contracts are made based on the cargo information provided by the manufacturer and the necessary documents are generated.
Upon arrival in Brazil, the dispatcher initiates the nationalization procedures, registers the Import Declaration (DI) and, after clearance of the cargo, the importing company issues the entry invoice, ending the import process.
After nationalization, it is possible to remove the cargo from the customs area and take it to the final destination address by contracting the Brazilian carrier that will be responsible for the inland freight.
How long does it take to import machinery and equipment?
The time varies from 5 to 150 days, so it can be said that the most correct answer to this question is: it depends on the type of machine and its forecast of availability at the source.
As Foreign Trade itself is made up of innumerable variables, the import of machinery and equipment also follows this “pattern”.
Purchase and production of machinery.
To quantify the time, beforehand, you should check if the product you need is ready, in this case, it will take a few days to pack it and make it available for shipment (2 to 3 working days on average).
If it is necessary to produce it, add time to the process that could be the main influencer of this period.
In addition, there is still time to clear payment abroad, which confirmation can take up to 48 business hours, so this time needs to be added in each necessary financial transaction, be it 30% down payment and the remainder on board, or 30 days after this, finally, there are countless possibilities and it depends on the negotiation.
Loading the goods in the international transport vehicle
In the case of maritime transport, which is usually more feasible due to the weight and volume of most machines, it is important to consider the time to obtain space reservation on the ship and effectively board, which can take between 7 to 14 calendar days scenario in which the market is normalized, without lack of container or other obstacles.
International transport.
After boarding there is the transit time, depending on the origin and destination. However, on average, this time between Asia / Brazil, for example, takes around 30 to 50 days.
Nationalization of machinery in Brazil.
The international journey of your machinery ends when you arrive at the port of destination in Brazil, where you will receive the presence of cargo necessary to start the Import Customs Clearance, which is the process by which the nationalization of your merchandise begins, by registering the Import Declaration (DI).
After registering the DI and considering parameterization in Canal Verde, it is possible that all the procedures to be carried out at the port, from the arrival of the cargo to the loading of it to its industrial plant, does not take more than 5 consecutive days.
If you encounter more bureaucracy or parameterize in the Yellow or Red Channels, this time can go up to 15 or 20 days.
Once nationalization obligations are complete, just count the travel time to the final destination of the goods in Brazil.
Can I import used machines and equipment?
The import of used machines and equipment should be seen as an exception: it is possible, as long as specific criteria and particularities are strictly followed.
Any import of used machinery needs to be analyzed and approved by SUEXT prior to shipment and, as a rule, to achieve this approval, there cannot be production of a national similar to the model that is intended to be imported. The analysis is made by requesting a pre-shipment Import License, in which the specific model of the machine, the condition of “used” must be informed and auxiliary documents such as manual and technical catalog attached.
Except for some specific and specific cases, SUEXT will make available, for thirty days, the documentation in public consultation so that there can be a manifestation of the Brazilian industry if they consider the used machine liable to be replaced by a national similar. If, after the period has elapsed, there is no manifestation, the LI tends to be deferred and the boarding authorized.
Even though boarding is authorized, when the cargo arrives in Brazil and the DI is registered, the process tends to be parameterized in a red channel so that there is a customs conference on the suitability of the machine.
What are the costs of importing machinery and equipment?
The cost of nationalized machines and equipment normally varies between 20 to 40% of their FOB value.
To quantify the cost, it is necessary to know the value of the merchandise, the tax classification (NCM), how much it will cost to transport and insurance and other costs in Brazil, such as storage, delivery transportation, customs broker, among others.
Costs in import processes vary according to the value of the asset to be imported, the exchange rate, the tax rates (vary according to the NCM) and the logistical details of each operation.
It can be predicted that there will be payment for international logistics (international freight and insurance - depending on INCOTERM), federal taxes (Import Taxes, IPI, PIS and COFINS), state tax (ICMS), and nationalization expenses, most important: Merchant Marine (maritime processes), Siscomex tax, storage in a bonded warehouse, expenses of the cargo agent at the destination, cargo handling at the port, fees and expenses for customs clearance and delivery freight to the final destination.
EX-Tariff
The Ex-tariff regime is the temporary reduction of the Import Tax rate for capital goods (BK) and computer and telecommunications goods (BIT) that do not have similar national production. This is a good possibility to reduce the costs of importing machines, for example.
The company interested in achieving this reduction must apply, together with the Ministry of Economy, to obtain the benefit, sending technical details that attest to the differential characteristics of the equipment. This documentation will be made available for public consultation for thirty days so that the Brazilian industry can manifest itself if it believes that there is production of a similar national product. In the absence of a manifestation, the request goes to the final analysis of the ME and subsequent publication in the Federal Official Gazette, when the II rate of that equipment will be effectively reduced to 0%.
Deferral or reduction of ICMS on imports
Machines and equipment can benefit from the reduction of ICMS governed by agreement 52/1991, which deals with operations for the acquisition of industrial machinery and agricultural implements. In these cases, the state tax base is reduced so that the effective ICMS rate reaches 8.8%, instead of the 18% applied to other products (full rate will depend on the state where the acquiring company is based).
In some states it is also possible to claim the ICMS deferral, as long as the machine is used to compose the company's fixed assets. The state of Minas Gerais, through SEFAZ MG, for example, grants full deferral of ICMS on imports, making it possible to collect the tax in installments later, reducing the immediate disbursement and improving the cash flow of the importing company.
Other states, such as Rio Grande do Norte, Paraíba, Espírito Santos and Santa Catarina, have specific tax benefits for certain profiles of importers, which considerably reduce the state tax rate to be paid on imports.
What is the Import Tax for machinery and equipment?
To answer this question, it is necessary to check the NCM of the product, which requires a detailed description of the machine / equipment (for the appropriate tax classification).
In general, the Import Tax starts at 0% (for the Ex-tariffs mentioned in the previous topic and some other types of machinery), and reaches the rate of 14% (the most common) in most of the Tariff list. Common Foreign (TEC), and in some rare cases there are rates greater than 14%.
What are the responsibilities of a machine importer?
From the moment that a company is designated to import a machine, it must do the complete planning of the operation, including the financial part. The importer is responsible for the good that arrives in the national territory, even if it is not immediately nationalized. If the company does not have, for some reason, resources available to nationalize the cargo (with payment of taxes and nationalization costs), it will still be responsible.
The Customs Regulation (IN / SRF nº 69/99) considers abandoned cargo that remains non-nationalized for periods longer than 90 days from the date of unloading in the customs area (it is possible that the Federal Revenue Service extends the period through the express interest of the importer).
After the deadline has elapsed, the importer is summoned to respond and, if there is no satisfactory answer, a procedure is initiated to apply the Forfeiture of Load penalty, when he will make the goods available for auction open to interested companies.
In summary:
This guide serves as a starting point for you who want to import a machine or equipment for your company. We intend to continue the subject in future articles, delving into important details that were left out.
If you have any questions, we are available to help you in all stages!