Implementation of the Brazilian Tax Compliance Plan: New Challenges and Opportunities in the Cross-border E-commerce Market

The implementation of the Brazilian Tax Compliance Program (Programa Remessa Conforme – PRC) marks a major adjustment to the countrys import tax. This policy came into effect on August 1, 2023, and its main content includes the unified collection of a 17% Circulation Tax on Goods and Services (ICMS) for cross - border consumption. For e - commerce platforms and sellers, this change brings new challenges and opportunities.Cross-border E-commerceI. Details of Brazils new tax policy

According to the new tax reform, a 17% ICMS tax will be levied on consumption on cross - border e - commerce platforms. Specifically, cross - border parcels worth less than $50 are exempt from tariffs but are required to pay a 17% ICMS tax; while parcels worth $50 or more are subject to a 60% tariff in addition to a 17% ICMS tax.
Changes in product labels

2、Mercado Livre的举措
作为响应，电商巨头Mercado Livre宣布加入该税务合规计划。对于50美元以下的跨境订单，ICMS税由买家支付，跨境卖家无需承担任何额外费用。这对平台卖家是一个重大利好。

Under the new policy, the outer box labels of products will change, with the addition of the Remessa conforme logo. This logo serves as a compliance mark for the Brazilian customs. Sellers only need to print and prepare the parcels and then hand them over to the logistics carrier.
Sales price limit

To enjoy the preferential treatment of exemption from import tax, the sales price of the product cannot exceed $50.
Restrictions on the shipping method

Products must be shipped through the post office or private companies.
Restrictions on the purpose of purchase

Purchases are limited to personal use. Cross - border transaction products sent from a company to an individual still need to pay import tax.
The explosion of the Latin American e - commerce market

The Latin American market, especially the Brazilian market, is growing rapidly. As the top of MercadoLibres four major sites, Brazil has the highest market share, and the total e - commerce sales during Black Friday last year increased by 19%.
Investment and competition of global enterprises

Given the huge potential of the market, global enterprises are vying for this market. For example, MercadoLibre announced in 2023 that it plans to invest 19 billion reais in the Brazilian market to improve logistics infrastructure and the operation team.
Challenges brought by tax policies

The new tax policy increases the operating costs of cross - border sellers and reduces the shopping desire of buyers. In addition, additional expenses and refund requests caused by product spot checks, as well as return problems caused by expensive freight, are all challenges that sellers need to face.
Export to Brazil