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Brazil Lowers Duties on Additional Products

Brazilian authorities recently announced the addition of 1,037 items to a list of foreign capital goods and information technology and telecommunications goods that benefit from reduced duty or duty-free treatment under the Ex-Tarifario regime. Of this total, 990 items are capital goods and the remaining 47 are IT and telecom goods. Classified in HS chapters 82, 84, 85, 86, 87, 89, 90 and 94, the capital goods will benefit from a reduced duty of two percent through 31 December 2017 (generally down from a duty of 12 or 14 percent), with the exception of five items that will benefit from such treatment through 31 December 2016 and one item that will benefit from such treatment through 30 June 2017. The IT/telecom goods, which are classified in HS chapters 84, 85 and 90, will also benefit from a reduced duty of two percent (generally down from 16 percent) through 31 December 2017.

Brazil’s Foreign Trade Chamber (CAMEX) indicates that 33.65 percent of the goods benefiting from the duty reductions under Resolution 47/2016, Resolution 48/2016, Resolution 55/2016 and Resolution 56/2016 originate in mainland China, 19.81 percent originate in the United States, 14.68 percent originate in Germany, 6.96 percent originate in Italy and 3.57 percent come from Austria. Domestic sectors benefiting from these duty reductions include energy (25.1 percent), capital goods (14.9 percent), railway (11.5 percent), services (5.8 percent) and food (4.5 percent).

CAMEX adds that 51.61 percent of the goods benefiting from the duty reductions under Resolution 63/2016 and Resolution 64/2016 originate in Germany, 20.36 percent originate in the United States, 7.36 percent originate in Italy and 4.47 percent come from mainland China. Domestic sectors benefiting from these duty reductions include pharmaceuticals and chemicals (24.8 percent), capital goods (14 percent), automotive parts (12.7 percent) and energy (12 percent).

CAMEX also recently added through Resolution 49/2016 a total of 46 items to the list of automotive parts that benefit from a reduced two percent duty, down from 14, 16 or 18 percent. In addition, Brazilian authorities have announced the following changes to Brazil’s list of exemptions to the Mercosur common external tariff. As a result, the duties on the following products have either increased or decreased.

  • Tall oil fatty acids classified under NCM 3823.13.00 – duty has been raised from two to 14 percent.
  • Barium carbonate containing at least 98 percent by weight of BaCO3, classified under NCM 2836.60.00 – duty has been lowered from ten to two percent.
  • Nimesulide classified under NCM 2935.00.94 – duty has been reduced from 14 to two percent.
  • Kidney beans classified under NCM 0713.33.19 and 0713.33.99 – duty has been lowered from ten percent to zero through 30 September 2016.
  • Vegetable fats and oils and their fractions classified under NCM 1516.20.00 – duty has decreased from 20 to ten percent (the duty for hydrogenated castor oil will revert to 20 percent on 1 October 2016).
  • Uncarded and uncombed cotton classified under NCM 5201.00.90 – duty has been lowered from ten to six percent (the duty will revert to ten percent on 1 October 2016).

Moreover, tariff-rate quotas have been established on the products listed below to correct a lack of supply in the Brazilian market.

  • Nickel Cathodes
    A maximum of 3,600 tonnes of nickel cathodes classified under NCM 7502.10.10 will benefit from a reduced two percent duty for a period of 180 days from 15 June. Out-of-quota merchandise will be subject to a regular MFN rate of six percent.
  • Monoisopropylamine
    A maximum of 26,282 tonnes of monoisopropylamine and its salts classified under NCM 2921.19.12 will benefit from a reduced two percent duty for a period of 12 months from 15 June. Out-of-quota merchandise will be subject to a regular MFN rate of 12 percent.
  • Sardines
    A maximum of 30,000 tonnes of sardines classified under NCM 0303.53.00 will benefit from a reduced two percent duty for a period of six months from 15 June. Out-of-quota merchandise will be subject to a regular MFN rate of ten percent.
  • Unalloyed Aluminium
    A maximum of 240,000 tonnes of unalloyed aluminium ingot, sow and t-bars classified under NCM 7601.10.00 will benefit from duty-free treatment from 18 August 2016 through 17 August 2017. Out-of-quota merchandise will be subject to a regular MFN rate of six percent.
Content provided by Picture: HKTDC Research
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