Brazil uses a multi-layered tax system where import duties and local taxes compound directly on top of the Cost, Insurance, and Freight (CIF) value of imported goods.
The Core Import Tax Layers
1. Imposto de Importação (II)
The federal import duty based on Mercosur Common External Tariff (TEC) rates, determined directly by the product's NCM code.
2. Imposto sobre Produtos Industrializados (IPI)
Federal tax on manufactured goods, calculated on the combined total of CIF value plus the Import Duty (II).
3. PIS-Importação & COFINS-Importação
Federal social integration contributions levied on foreign goods entering domestic commerce.
4. Imposto sobre Circulação de Mercadorias e Serviços (ICMS)
State-level value-added tax calculated on the total cumulative sum of all previous duties, freight, insurance, and port handling fees.
The Compounding Effect: Because each tax calculates on the accumulated total of prior duties, a product with a 15 percent nominal tariff often carries an effective tax burden exceeding 50 percent at customs.