Planning is essential for the feasibility of import and export operations

Prior assessment of tax aspects and obligations contributes to the success of transactions.

Jefferson Gonçalves e Cássia Calixto

Regardless of the size of the company, the business area, and the process on the agenda, planning actions is essential. It is not different when the subject is import and export. These activities require the development of strategies so that the entrepreneur is not surprised by procedures, formalities, and operational costs.

In practice, these operations require the company to organize and seek information about ongoing rules to minimize any financial risk and loss.

It is not uncommon for managers or even professionals in charge of activities only realize that a process could have been better adjusted when it is underway.

The analysis of tax and financial costs being left in the background during contract negotiation is often seen is, while this should be an important step to consider in any import and export operation, observing its impact on total costs of these operations.

This is the time for tax, financial and accounting planning, when a multidisciplinary team of specialists must calculate and simulate gains and losses, assisting in the decision to continue hiring.

Planning and, of course, attention to the current legislation, the results and total costs of these international transactions are under control.

Important considerations for import and export

As with any business plan, it is essential to analyze opportunities and risks, to know the legal requirements, procedures, taxes, and other obligations that underlie the activity to be performed.

Agreements between parties

It is at this stage that every import and export transaction should begin. It is important that contracts are established between the parties involved to back up operations.

This item is required to identify the nature of the service, one of the points that should be correctly reported in the Foreign Trade Integrated System (Siscoserv).

Another application is so that the company can enjoy some tax benefit and/or be properly taxed. Such conditions must be provided in the contract to support tax treatment.

Many are unaware, for example, of the possibility of withholding income tax (IR) by the payer upon settlement of the service import exchange. Frequently, contracts are signed without anything in this regard being scored. Thus, all costs for import are eventually assumed by the local company (contractor), and the charges and expenses may reach 50% of the total value sent overseas.

Thus, due consideration and importance should be given to the conditions established in the contracts, together with the prior analysis of the tax rules and costs involved, as they end up influencing the financial viability of the operation.

Taxation

Other questions about taxation should also come into the assessment. In addition to taxes on imports, such as PIS, COFINS, IOF, etc., it is also necessary to consider customs duties and taxes. It is worth noting that the payment of these costs falls on the purchaser of the good or service.

When the goal is to export, the company must raise the cost-benefit of selling abroad. This account includes the payment of Export Tax (IE), which is added to other customs expenses.

The IE tax rate is generally 30% of the tax base. Some products, by way of exception, have a reduced rate, exempt or greater than this percentage.

As the government can decrease or increase the rates according to the outlined strategies, permanent attention is required to the rules in force.

It is also worth noting that, in certain services export operations, tax immunity is granted, situations in which there is no levying of ISS, PIS and COFINS.

It is necessary to investigate whether there are double taxation agreements entered into between Brazil and the country of the resources destination, which allows, in certain cases, the exemption of the IR on the foreign exchange transaction for payment of imported services.

In other cases, the tax withheld and collected by the payer may be used as credit by the foreign company in its home country, depending on bilateral agreements between Brazil and these countries, which may represent a decrease of 25% in tax influence on payment transaction to the importing company.

Foreign exchange contract

The exchange rate establishes the value relationship between two currencies, matching the price of the currency of one country with that of another nation.

Foreign exchange closing, both in import and export transactions, is carried out through institutions authorized by the Central Bank of Brazil (Bacen), the agency responsible for regulating and supervising the foreign exchange market in Brazil.

Companies should also be aware of the need to sign an exchange contract. This document is issued by the foreign exchange trading bank to formalize the foreign currency exchange by the domestic exchange.

The contract is essential to release the good purchased at the destination, and is important to establish, among other points, the currencies involved and the corresponding value in each currency.

Intercompany Transactions

This refers to remittances between the parent company and subsidiaries in other countries or to import and export operations between companies in the same group.

This type of transaction is also subject to rules. In this context, the concept of transfer pricing is applied for the correct allocation of income from transactions between these companies, balancing the tax bases of the jurisdictions involved.

Imports, exports and payment and receipt of interest (contracts registered with the Central Bank) must be under the transfer price calculation. The Taxes Authorities do this control to avoid distortions in the calculation of profits.

Support to comply with the transaction process

Domingues e Pinho Contadores has a multidisciplinary team to assist companies in the import and export processes of goods, services, and intangibles, in researching bilateral agreements between Brazil and other countries, in calculating and simulating tax impacts, optimizing the time spent with these operations and the involved costs.

In addition to Tax and Accounting Consultancy, DPC has a dedicated department to Siscoserv, which advises clients on transactions recordings at the system, ensuring transaction compliance and full compliance with legal requirements.

On the other hand, the Financial Management department provides support throughout the process of executing foreign exchange operations, assisting the client company from gathering the necessary documents, through evaluation of contract costs and payment of invoices, to the negotiation of closing fees exchange with authorized financial institutions.