To learn more about Drawback, allow us to summarize its concept first.
Developed by the Federal Government in 1996, this regime allows the suspension or exemption of taxes on the importation, national or international, of inputs linked to products that will later be exported. This means that it will not be mandatory to pay certain fees for the nationalization of products.
To learn more about the concept of Drawback, we advise that at the end of this article, access our post that explains in more detail what it is.
We can start by informing you that this is one of the most used regimes by Brazilian exporters, if you are not already part of this statistic, you will certainly decide to do so by the end of this article!
Next, we will explore its modalities and basic procedures to obtain this special customs regime. Então, vamos lá?
Drawback is subdivided into three different formats, which are: integrated exemption, integrated suspension and refund. To facilitate understanding, we will explain item by item below.
This modality is also known as “stock replenishment”. This method is chosen when the company has already made purchases in the last two years with the payment of taxes and uses this input for its own production, in this case always looking for similar inputs in quantity and quality.
The company that fits these requirements has the right to open a claim for exemption Drawback, in order to create the habit of maintaining the frequency of importation for its internal stock, thus being able to be exempt from taxes.
This is considered the simplest and most objective method, as this modality suspends the collection of taxes at the moment when the inputs used for the development of products are imported.
At this point, the company has not yet made any exports, so it will have to guarantee that the final product will, in fact, be exported.
If this does not happen, there are great chances of one of the incentives and of suffering the same. To make it clear, if the rules to be followed are complied with, the company will be stipulated the taxes with mandatory compliance that will not follow the rules.
This is considered a modality with less use in transactions, estimating that only 3% is doing the Drawback of the same.
Being the opposite of the modality that organizes itself to keep stock, resistance is used in cases where the company imports the raw material paid or the mandatory taxes, but has no interest in reporting its stocks.
In circumstances like this, the importer has the right to have his tax refund paid for imports of inputs from the tax authorities.
Concessionary act of Drawback: how to get it?
To obtain the Drawback, the so-called concession act is necessary, and for this there are also three different types. But don’t worry, we will also explain one by one.
It fits into the common type when the company involved in the suspension or exemption of taxes is the same that manufactures and exports the product. These inputs and products must be previously listed at the opening of the application by SUEXT (Subsecretariat of Foreign Trade Operations).
Unlike the common type, the intermediate type is when there is more than one manufacturer involved in the process. That is, a company operates in the purchasing and production part, but sells its product to another company, and it is this company that will carry out the export.
There are many possibilities of participants considered “intermediate manufacturers” within the same Drawback claim.
The generic type is similar to the common one when it comes to beneficiary and exporter, as both will have to be the same company. What makes this operation different is that the company will not be forced to discriminate the inputs that will be imported, or acquire them within the national market.
This occurs because the production process is relatively long or several times of great complexity, because of this, generic discrimination is allowed as well as its respective value.
It is worth remembering that in order to make a Drawback request, attention to the information is extremely important. At the time of registration in certain modalities, it is necessary, for example, to inform quantities and values of the inputs, whether they are imported or national.
Planning is present at these times to ensure the best benefit result. The organization, when providing the required information, is what can guarantee or not this advantage, because in cases of defaults or holes in the reported data, it can result in loss of the financial benefit of this operation.
A valid tip for these situations is to act methodically, especially in cases of large volume of data, thus minimizing the chances of possible errors.
Yes, there are possibilities for corrections after the granting of the Concession Act, but not unanimously applied. The progress of the process may be temporarily interrupted, but it may also lead to a reduction in the financial benefit.
Although there is a period of 30 calendar days, SUEXT can analyze the adjustments and still reject these changes.
It is extremely important that you submit supporting documents together!
And as we said, there are still changes that are not even allowed, so it’s worth paying attention while organizing the requests initially, saving further confusion.
On the positive side, despite the need for attention and care, the Concession Act is valid for twelve months and, after its completion, there is still the possibility of the term being extended for another twelve months, which can be requested with a click within However, these options are only valid for suspension and exemption modalities.
Conclusion: Is it worth it?
Assessing the issue of not paying taxes will automatically result in a reduction in both financial and fiscal charges and costs. This factor directly influences the company’s cash flow, which we can then say becomes profit.
Interested in being part of this scheme? Open Market can assist at all stages of this process. Contact right now and talk directly to an expert.