Formal Import and Courier Import: what are the main differences?

Many companies are born with the intention of importing products, but their administrators start this project without knowing that there are two modalities: Formal Import and Courier Import.

Therefore, in this article we will show a little of these two modalities, the main differences and when to use each one.


What is Formal Import?

Formal Import deals with the movement of goods between countries observing the rules established by the importer's country, bringing more complexity and bureaucracy to the importing process. In this modality companies/importers need to have qualification in the current SISCOMEX Radar.

In addition, the goods must go through the Customs Clearance process, which requires the hiring of customs broker to carry out the procedures before the Brazilian Internal Revenue Service (RFB).

What is Import via Courier?

Import mode by air that arrives in the country on an express basis and is limited to USD 3,000.00.

It is popularly known as Import via Courier, but the correct name is Express Shipping (Remessa Expressa in Protuguese).

This type of Import includes goods or documents arriving in Brazil transported by the Post Office or by private international express transport companies, also known as Courier Companies.

In Express Shipping the process is less bureaucratic, Customs Clearance is simplified, and, in addition, the importer does not need to be enabled on Radar.

Taxation in the Formal Import or via Courier.

We have reached the point that every importer needs to analyze in detail.

Formal Import Taxation.

The taxation of Formal Imports is based on the NCM used in the process.

The Mercosur Common Nomenclature (NCM) is fundamental to determine the taxes involved in foreign trade and outflow operations of industrialized products. In addition, NCM is the basis for the establishment of trade rights, and is also used under the ICMS, customs valuation, import and export statistical data, the identification of goods for the purposes of special customs procedures, administrative procedures, import licenses, etc.

Brazilian Internal Revenue Service

Therefore, each NCM defines the percentage of taxes, which are:

  • Import Tax (II);

  • Tax on Industrialized Products (IPI);

  • Social Integration Program (PIS);

  • Contribution to social security funding (COFINS).

In addition to the taxation of 2 other items that are not defined by the NCM, but that will be charged:

  • Siscomex Utilization Fee;

  • Additional to Freight for the Renewal of the Merchant Navy (AFRMM); and

  • Tax on Circulation of Goods and Services (ICMS).

ICMS rates vary by State and type of imported product.

Import Taxation via Courier.

In Import via Courier, taxation is simplified: 60% Import Tax on Customs Value should be applied (= merchandise + freight + insurance), and there will also be incidence of ICMS (varying according to each State, equally).

It is important to remember that the calculation in this import modality is the same, regardless of the NCM and, moreover, there is no application of special customs procedures.

Logistics efficiency of Formal Import and via Courier

Surely logistics efficiency is not defined only by the option between Formal Import or Courier, but by planning. Based on the assumption that your planning is, we can understand how logistics works in both modalities.

The logistics of Formal Import.

Decided by Formal Import, we need to simplify how logistics will be. At this stage it will be necessary to check the legal requirements and administrative treatment that falls on the product you want to import and choose the type of shipping modal.

Assuming that the choice is by air modal, once the goods are shipped it is necessary to monitor the landing and the procedures of the Customs Clearance, which are made by the hired broker.

At this stage of the Customs Clearance happens the registration of the Import Declaration and the payment of taxes, parameterization and, being all "OK", the release.

Note: In case the product to be imported is subject to the approval of some regulatory body (the famous LI), it is necessary to observe the requirements as to the time of shipment. For automatic LI, boarding can take place before the LI approval, in the case of a non-automatic LI, the shipment cannot be made before the approval. The deadlines for analysis and approval also vary: 10 days in the case of automatic LI and 60 days in the case of non-automatic LI. For more details visit SICOMEX website.

After release, you must issue the invoice (Nota Fiscal in Portuguese) and then trigger the company (which should already be on notice) that will transport your goods from the airport to the final destination.

The Customs Clearance of Formal Import may occur on the same day of the registration of DI, however, in some cases more days may be necessary, depending on parameterization or if it depends on customs transit, before registering the DI.

The logistics of the Import via Courier.