Established in Brazil in 1966 by Decree Law No. 37 of the Federal Government, Drawback is a special customs regime created to stimulate Brazilian exports. Even though the legislation is old, there are companies that give up the benefits it generates due to pure ignorance. With this they end up paying unnecessary taxes, once the law guarantees the suspension, exemption, restitution or reduction of taxes and fees charged on goods that are imported for the industrialization of products that will be destined to the external market.
In this post we will analyze the special Drawback regime so that you have all the necessary information to seek this benefit for your company.
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The first measure to be taken by those who wish to benefit from the Drawback regime is to obtain the Concessionary Act, a document that is issued on behalf of the industrial or commercial company that imports the input with the purpose of producing goods that will be destined for export. This document gives the approval of the concession of the right to buy the inputs with the benefits of the Drawback regime, which will be linked to the promise that the final product will be exported.
It is important to note that this export should be made exclusively by the company owning the Concessionary Act.
For the modalities of exemption and suspension of taxes, which will be detailed below, the company must fill out the Unified Drawback Report, in which it will inform the documents that were registered in the Foreign Trade Systems (Siscomex), which are:
These documents will prove that the import and export operations are linked to the special taxation regime and will be linked in the Concessionary Act, which will be necessary later in order to be withdrawn from Siscomex.
It should be noted here that the same NoE cannot be used to prove different Concessionary Acts issued to the same company, which means that each NoE will be bound to a specific Concessionary Act.
The fact that a product benefits from the Drawback regime does not exempt the company from having to comply with all existing general rules, including the administrative treatment that must be applied to the case.
It is also important to note that the granting of the scheme does not mean obtaining an import quota for a certain input or export of a product. Nor does it dispense with the procedures required by other bodies when there is the import or export of products, which applies in specific cases.
Furthermore, it should be noted that the special regime is not granted for the import of inputs that will be used in the manufacture of goods for consumption in the Manaus Free Trade Zone or in free trade areas, nor for the import or export of suspended or prohibited products. There will also be no concession of the Drawback regime for exports that will be paid with national currency or with a contract currency or other non-convertible currency, nor for the import of oil and derivatives, in accordance with what is established by Decree 1495/95, or for exports that are linked to other customs regimes or that receive other forms of incentive.
Under the Drawback regime the company obtains exemption or suspension of the:
In addition, the company is also exempted from collecting fees other than for the provision of services, as provided for in the legislation in force.
Considering that a company has imported goods through the payment of taxes and considering that these goods have been used in the manufacture of products that were directed to export, by this modality the company will be exempt from further taxation if it imports other goods in quantity and quality equivalent to those that were used in exported products.
For this modality is also granted the Drawback for Replacement of National Raw Material, when there is the import of goods destined to replace national raw material that has been used in manufacturing and products that were exported.
In this modality the taxes that would be levied on imported goods are suspended, as long as they are used in the industrialization of products that will be destined for export.
This modality is applied according to the operations of:
Both in the exemption modality and in the one that generates tax suspension, it is also necessary to consider two other operations, which are:
For this modality the company that has been taxed in the import of used in the industrialization of products that will be destined for export receive the refund of what was paid. However, currently this modality is no longer so used, since the exemption and suspension of taxes replace it in advance.
The special Drawback scheme benefits the following import cases:
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