Government will tax international purchases of up to US$50

In fact, the rule already existed, but it presented a loophole that allowed almost a “blind eye” to those items that did not have such high values.

According to IRS, the exemption never applied to online retail but only for “individual-to-individual shipments”. However, the practice began to be used, fraudulently, “for sales made by foreign companies”.

What's the problem now?

The sale of products from abroad, mainly from Asian companies such as Shein, Shopee and Aliexpress, represents unfair competition with national products. Therefore, it was necessary to make the rule tougher, with greater supervision.

In a note, the Federal Revenue explained that, from now on, “there will no longer be any distinction in treatment between remittances by legal entities and individuals (today remittances by individuals of goods with relevant value are absolutely meaningless). This distinction is only serving widespread fraud in remittances.”.

In other words, orders coming from abroad with a value of up to 50 dollars are also subject to a 60% tax on their value.

You may be upset by this news, but…

The measure should benefit local retailers, which boost the Brazilian economy. In fact, the decision came after a series of complaints from the sector about unfair competition with overseas giants.

O Minister of Finance, Fernando Haddad, had already informed that the government would adopt some tax measures for those who do not pay taxes as they should be paid.

He also explained that “one or two large global companies” disguise their electronic retail activities, sending shipments from person to person to avoid paying taxes.

According to the minister, combating this practice should generate up to 8 million reais in new revenue for the Brazilian government.

Curto Curatorship:

• Why Lula decided to make shopping on Shein and Shopee more expensive (Look)
• Will purchases on Shein and Shopee below US$50 be taxed? Understand what should change (InfoMoney)

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