Brazil is already one of the most coveted markets for international brands, attracted by the significant adoption of e-commerce by the population. In fact, 61% of the residents buy more online than in physical stores, according to a survey by Octadesk in partnership with Opinion Box. It’s worth noting that the country is home to more than 200 million people. Moreover, the variety and innovation brought by imported brands are capturing the hearts of Brazilians more and more. However, there are challenges, such as importation costs.
Companies that do not adhere to the Remessa Conforme Program, persisting in the traditional shipping method, should be aware of the taxes that fall on their goods, they are:
- Federal tax corresponding to 60% of the total value of the shipment;
- Tax on Circulation of Goods and Services (ICMS) — 17% on top of the final value of the shipment already considering the federal tax.
These additional costs can significantly increase the final price of the product for Brazilian consumers. As a result, international e-commerce may struggle to compete with local companies that don’t have to bear these taxes. This can lead to a decrease in sales, loss of competitiveness in the market, and even potential customers giving up and seeking more affordable alternatives.
To mitigate the adverse effects of importation taxes, it is essential for international e-commerce to adopt smart strategies, such as joining the Brazilian Customs’ Remessa Conforme Program. Continue reading to understand how to reduce importation costs for your customers.
How Can Importation Costs Affect Your Sales?
With the tightening of Brazilian Customs’ inspection, e-commerces that do not join the Remessa Conforme Program will be affected by a decline in sales in the country.
Price Increases
Importation costs, along with freight and other charges, significantly raise the final price of imported products. Especially for low-value goods, these taxes can make them much more expensive compared to local options and, consequently, less attractive to Brazilian consumers.
Loss of Competitiveness
With higher prices due to importation costs, international e-commerce may lose competitiveness in the Brazilian market. Local companies can offer similar products at lower prices, gaining preference from consumers.
Impact on Sales Volume
The increase in prices of imported products can lead to a reduction in sales volume. Consumers may be discouraged from making purchases, especially if more affordable options are available in the local market.
Barriers to Expansion
Importation costs can also be a significant barrier for international e-commerce looking to expand their operations to Brazil. The risk of not being well-received and incurring losses can discourage companies from entering this market, especially those that lack technological solutions to optimize and secure their export operations to the country.
To mitigate the impact of importation costs, international e-commerce can adopt various strategies. Some examples include seeking local partnerships to reduce logistics costs, optimizing importation and distribution processes. However, the main step is ensuring compliance with customs laws in the country. This step is essential to solve this and other challenges in your sales project for the country.
Remessa Conforme: Brazilian Customs’ Program Promising Importation Tax Savings
The Remessa Conforme Program is an initiative of the Brazilian Customs that aims to facilitate the process of importing and exporting foreign products to Brazil, providing agility in customs clearance and tax savings for registered companies.
To qualify, organizations must be 100% compliant with customs laws and meet a series of requirements required by the agency. For international e-commerce, compliance with the program offers significant benefits, making the process of sending goods more efficient, less burdensome, and improving the shopping experience for customers in Brazil.
- Exemption from federal tax for shipments up to US$50;
- Fixed ICMS rate of 17%;
- Early nationalization of goods;
- Priority in customs treatment—shipments go through the Green Channel;
- Faster delivery to the end customer;
- Company’s disclosure on the Brazilian Customs website.
With the simplification and reduction of importation costs provided by Remessa Conforme, international e-commerce have the opportunity to offer products at more competitive prices in the Brazilian market, increasing sales, and expanding their operations more efficiently and in compliance.
Stay on the blog and learn more about how the Remessa Conforme Program works and how Sinerlog helps your company in the compliance process.
