Customs regime and Drawback

The In Company course “Sistemática de Exportação” (Export Systematics) is organized by ABEST and promoted by the Fashion Label Brasil Program in partnership with Apex-Brasil. Ana Maria Matta Walcher, the course teacher, who is a commercial and operational specialist in export and import, presented the article “Understanding the Benefit of Drawback”.

Understanding the Benefit of Drawback

Drawback is an incentive that relieves taxes levied on imports and purchases in the domestic market. This benefit is only valid for the industrialization, transformation, assembly, reconditioning or renovation of a product. Therefore, if you do not work with these variations, you cannot obtain the exemption.

Under the Drawback regime, if the entrepreneur imports goods that will be used in manufacturing a product for export, all import taxes will be suspended and in the purchase of inputs in the Brazilian market for export, the tax will be exempt on entry and exit at the time of export.

The goal is to promote the growth and expansion of the business through the exemption / suspension of taxes and tax credits. According to the Internal Revenue Service, in the last four years, 29% of all tax benefits granted by the government are related to Drawback. In other words, drawbacks enable Brazilian exporters to guarantee competitiveness in the international market.

There are 3 classifications within this regime:

Exemption: intended for the replacement of imported or purchased goods in the domestic market that were used in the industrialization of an exported product.

Suspension: intended for goods that will be imported or purchased on the domestic market to be used in

the industrialization of an exported product.

Refund: intended for the refund of taxes that were paid on the importation of goods that are used in the industrialization of an exported product.

What is the Drawback Culture

To adhere to the Drawback regime, exporters must mitigate risks to avoid further penalties. As it involves input / output of information and actions, it should be a very well-aligned and closely monitored process.

A company that is already used to acquiring imported and domestic inputs under the normal purchase regime, before joining Drawback, must review all administrative, financial, fiscal, commercial, and operational management.

This adjustment is necessary to meet all requirements requested by the customs regime.

Enjoy your reading and we wish you good deals!

Author: Ana Maria Matta Walcher

Telephone number and WhatsApp: 11 9.9625-0338

E-mail: akawalcher@gmail.com

https://www.linkedin.com/in/ana-maria-matta-walcher-bb772823/

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