We know that importing can seem daunting. The vast amount of paperwork and licensing can be intimidating, but what are the actual costs of importing? This is a crucial factor in determining whether to proceed. Costs range from purchasing the product to delivering it to your door.

In this article, we'll explain everything you need to know about import costs. Don't worry if it still seems like a lot! Genco is here to assist you with the entire process, documentation, logistics, and costs of your import. Despite the many costs and bureaucratic hurdles, importing often brings financial and technological competitiveness.

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Product Costs

There are countless suppliers out there and finding the right one can be time-consuming. But don’t skip this step! Finding the desired quality at the lowest price is crucial because all taxes will be calculated based on the product value.

Additionally, be aware of exchange rate fluctuations. They vary from currency to currency, and although the exchange rate is usually fixed in dollars, there may be other currencies in effect, such as the Chinese RMB.

When it comes to the Chinese market, the best suppliers can be very difficult to find and contact on the major platforms available overseas. Genco has offices in China, the US, and Europe and has access to the best suppliers for your product!

Import Taxes

To bring any product to Brazil, there are import tax costs. Generally, these are: II + IPI + PIS + ICMS + COFINS. The rates vary from 0% to 35%, depending on your product. It is possible to check the rates depending on your state and by studying the NCM (Common Nomenclature of the Mercosul), which is a code used to classify goods in foreign trade.

What is each one?

• II - Import Tax

A federal tax levied on foreign goods entering the country, with the purpose of protecting domestic industry and regulating foreign trade. It is calculated based on the CIF value of the goods (goods + freight + insurance).

• IPI - Tax on Industrialized Products

A federal tax levied on industrialized products, both domestic and imported, charged at the factory gate or upon customs clearance. It is calculated on the CIF value + II.

• PIS - Social Integration Program

A federal social contribution used to finance unemployment insurance, wage bonuses, and other benefits for workers. It is levied on the company's turnover. Generally, this value is 2.1% of the CIF value.

• ICMS - Tax on the Circulation of Goods and Services

A state tax levied on the circulation of goods, interstate and intermunicipal transportation, and communication services. It's important to note that some states offer ICMS benefits for imports, which may vary.

Additionally, ICMS is usually the main tax in the chain, as its calculation base includes value of the goods + freight + insurance + stevedoring + II + IPI + fees (Siscomex) + contributions (PIS/COFINS) + customs expenses + the amount of the tax itself. In São Paulo, for example, the ICMS rate is 18%.

• COFINS - (Contribution for the Financing of Social Security)

It is a contribution that companies pay to help finance public health and social security in Brazil. It is also charged on the money the company earns. Generally, this value is 9.65% of the CIF value.

Do I REALLY have to pay all these taxes? Yes! These taxes are essential to ensure the viability of your process. Count on us to answer your questions and conduct studies on possible tax benefits.

Logistics and Freight Costs

To ensure your product reaches you, there are also logistics and freight costs. Logistics includes various factors such as transportation to the port, handling, cargo storage, loading and unloading, among others. Freight is the cost of booking a container, or a space within it, on a ship, in the case of maritime freight, or a space on a flight, for example, in the case of air freight.

Freight rates fluctuate and are always subject to change, as external factors such as wars, embargoes, pirates, congested ports, and overbookings significantly influence prices and container availability. Count on Genco to take care of the logistics study and freight for you!

Operational, bureaucratic, and customs clearance costs

Here we can consider, mainly, the cost of customs clearance, which is the process of verifying the data declared by the importer in relation to the imported goods, the documents presented, and the specific legislation.

Additionally, consider as an extra cost if your cargo requires a special approval from a specific agency, such as Anvisa, Inmetro, Anatel, etc.

Insurance

Finally, insurance for your cargo is essential for its safety. Be sure to purchase insurance, the value of which can vary from 0.5% to 2% of the value of the cargo. Better safe than sorry, right?

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Did you find it overwhelming?

Even with all the costs, importing correctly can bring many benefits to your company.

We understand! In addition to all this, it's important to conduct a study of your company and enable your radar on Siscomex. Having specialized import consulting can save you from many risks and costs. Just look at what Genco Import & Export can do for you:

• Sourcing your product to find the best value for your product.
• Simulating all costs before you embark on this journey.
• Negotiating values with suppliers, freight forwarders, and customs brokers.
• Unifying all documents. Less headache for you!
• Closing the exchange rate for your process.
• Conducting inspections and issuing complete reports for your follow-up.

And much more!

Count on Genco for the best advisory for your imports.

Contact us and learn more about our services!

Written by: Natália Coyado