Brazil To End Tax Exemption On International Orders, Targeting Asian E-Commerce Giants

• Brazil's government announced on Tuesday, April 11, it would end a tax exemption on international orders up to $50 as part of an effort to tax purchases from global retail giants.
• The revenue service said that the exemption never applied to e-commerce but only to shipments from individual to individual, and had been "widely and fraudulently used for sales made by foreign companies." Given this, there would no longer be any distinction in treatment between legal entities and individual shipments, with international orders subject to the existing 60% taxation on their value.
• The measure is expected to benefit local retailers and comes after widespread complaints from the sector about unfair competition from Asian giants such as AliExpress, Shein, and Shopee.
• Finance Minister Fernando Haddad had already stated that the government would soon unveil tax measures aimed at those who were not paying taxes to boost revenue and improve public accounts.
• Haddad emphasized that "one or two global players" were disguising their e-commerce as person-to-person shipments to avoid paying taxes. Combating this practice, which Haddad called "smuggling," is expected to generate between 7 billion and 8 billion reais in new revenue for the government.

(Source: Reuters)