Foreign sites will have to include Brazilian tax in the price, says IDV president – 04/20/2023 – Market

Foreign e-commerce sites that sell to Brazil, such as AliExpress, Shein and Shopee, will have to start including the Brazilian tax amount at the time of closing the sale to the consumer.

The measure is being debated as part of a plan to adapt these sites, which is being negotiated with the Ministry of Finance and Brazilian retail representatives.

“If you buy goods where you were not notified about the tax, (…) when the goods arrive in Brazil, the consumer has to go to the Revenue to pay that tax. Sometimes there is a fine. This will be transparent. everything is in the price”, said Jorge Gonçalves Filho, president of IDV (Institute for the Development of Retail), which represents large Brazilian chains.

Gonçalves met with the Minister of Finance, Fernando Haddad, this Thursday afternoon (20), in São Paulo. He said that Brazilian businessmen are talking to the ministry to help create a plan to adapt international websites.

“This is a first step: making the price the final one, and the tax being paid in the transaction,” he said.

However, there is no deadline for the measures to be put into effect. Gonçalves asked that this be done as soon as possible. “Brazilian retailers have felt the issue of international trade a lot. We must have an open country, but that companies operate with the same rules. We have the perspective that competition will be fairer.”

Earlier this Thursday, Haddad announced that he had signed a term of commitment with Shein for the nationalization of products offered by the Asian giant in up to four years. The company said it will open a factory in the country, offering around 100,000 jobs for Brazilians, according to the minister.

“The products will be made in Brazil. It is very important for us that they see the country not only as a consumer market, but as a production economy”, stated Haddad.

According to the minister, Shein also committed to adhere to the Federal Revenue’s compliance plan. On the other hand, he said, the retailer demanded that the rule apply to everyone.

The commitment to Shein responds to President Luiz Inácio Lula da Silva’s request to solve the problem of tax evasion in electronic commerce in an administrative manner.

The Ministry of Finance had said that it would suspend the tax exemption on shipments of products from abroad to Brazil, made by individuals and that the value of the items is less than US$ 50, because the rule would be being used to avoid payment of taxes. Purchases made abroad directly from companies are taxed by current law.

However, the government withdrew from the measure after pressure, and said it would strengthen enforcement of current rules.

This Thursday, Haddad stated that he intends to follow the examples of developed countries. “They call it a digital tax abroad. The tax will have been made by the company, without passing on any additional cost to the consumer”, he said.