Duty Relief
Drawback: 100% Tax Recovery
How Brazilian importers recover all import taxes when manufacturing for export — and why this matters for your pricing strategy.
Updated May 2026
If your Brazilian buyer imports your product as an input to manufacture something they'll export, they can recover every single import tax they paid — II, IPI, PIS, COFINS, ICMS, and AFRMM. This is Drawback, and it's one of the most powerful trade incentives in Brazil that almost nobody explains well in English.
Taxes referenced in this guide
?What is an NCM code?
NCM (Nomenclatura Comum do Mercosul) is Brazil's 8-digit tariff classification code. The first 6 digits match the international HS (Harmonized System) code — the remaining 2 are Mercosur-specific. Every import tax rate in Brazil is determined by the NCM code.
HS → NCM lookup tool?What is ICMS?
ICMS (Imposto sobre Circulação de Mercadorias e Serviços) is a state-level VAT charged on imported goods. Rates vary by state (typically 17–20%, up to 25% for some products). ICMS cascades on top of other import taxes, significantly increasing landed cost.
ICMS rates by state?What is AFRMM?
AFRMM (Adicional ao Frete para Renovação da Marinha Mercante) is an 8% tax on international ocean freight for goods arriving by sea. It funds Brazil's merchant marine fleet. Only applies to maritime shipments — air freight is exempt.
All 7 import taxes explainedThe sales pitch you should be making
"Your Brazilian customer gets ALL import taxes back when they export the finished product using your inputs. The effective tax rate on your components is zero — not because of an exemption, but because they get a full refund."
What is Drawback?
Drawback is a special customs regime (regime aduaneiro especial) regulated by Decree-Law 37/1966 and managed by SECEX (Secretaria de Comércio Exterior) under MDIC. It eliminates or suspends import taxes on inputs that will be used in the manufacture, processing, or repair of products destined for export.
The logic: Brazil doesn't want to tax inputs that will leave the country as part of a finished product. Doing so would make Brazilian manufacturers less competitive internationally. Drawback solves this.
Three modalities
1. Drawback Suspension (Suspensão)
The most common modality. Taxes are suspended at the time of import — the importer doesn't pay them upfront. After exporting the finished product within the authorized period, the suspension becomes definitive (taxes are forgiven).
2. Drawback Exemption (Isenção)
For importers who already paid taxes on inputs and already exported the finished product. They can import replacement inputs tax-free — in the same quantity and quality as those used in the exported product.
3. Drawback Restitution (Restituição)
The importer paid all taxes on the inputs, manufactured the product, and exported. Now they request a refund of all import taxes paid. Less common because it requires the importer to front the cash — Suspension is usually preferred.
Drawback Integrado: the modern version
Since 2010, Brazil operates Drawback Integrado, which expanded the regime to cover both imported AND domestically purchased inputs. For your purposes as a foreign exporter, the key improvement is that your Brazilian buyer can use Drawback Integrado to suspend taxes on your imported inputs alongside domestic inputs in the same production process.
The Ato Concessório (authorization act) is issued through Siscomex and specifies exactly which inputs, in which quantities, for which export products.
Which taxes are covered?
| Tax | Suspension | Exemption | Restitution |
|---|---|---|---|
| II (Import Duty) | Suspended | Exempt | Refunded |
| IPI | Suspended | Exempt | Refunded |
| PIS | Suspended | Exempt | Refunded |
| COFINS | Suspended | Exempt | Refunded |
| AFRMM | Suspended | Exempt | Refunded |
| ICMS | State decides | State decides | State decides |
ICMS exemption under Drawback depends on CONFAZ Convênio 185/2010 — most export-oriented states grant it.
Real example: automotive components
A German auto parts manufacturer sells steel components to a Brazilian car plant that exports finished vehicles to Argentina.
| Without Drawback | With Drawback (Suspension) | |
|---|---|---|
| CIF value | EUR 200,000 (R$ 1,224,000) | EUR 200,000 (R$ 1,224,000) |
| II (14%) | R$ 171,360 | R$ 0 (suspended) |
| IPI (5%) | R$ 69,768 | R$ 0 (suspended) |
| PIS + COFINS | R$ 143,820 | R$ 0 (suspended) |
| ICMS (18%) | R$ 352,900 | R$ 0 (suspended) |
| Total taxes | R$ 737,848 | R$ 0 |
| Saving | R$ 737,848 (60% of CIF) |
Who benefits from Drawback?
Your product is a strong Drawback candidate if your Brazilian buyer:
- Is a manufacturer that exports — automakers, agribusiness processors, aerospace, electronics assembly
- Uses your product as a raw material, component, or intermediate good in their production
- Has a predictable export schedule — Drawback Suspension requires export within 1-2 years
Industries where Drawback is most used in Brazil:
Parts and raw materials
Embraer supply chain
Fertilizers, equipment
Raw materials for export
Components for assembly
Inputs for export products
The application process
- The Brazilian importer applies via Siscomex — submitting the Ato Concessório (authorization act) specifying: which inputs to import, quantities, NCM codes, and the export product they'll manufacture.
- SECEX analyzes — verifying that the import/export relationship is technically feasible and economically justified. Processing time: 5-15 business days for Suspension.
- Import with suspension — once approved, the importer imports the inputs without paying taxes. The customs declaration shows "Drawback Suspension" as the customs regime.
- Manufacture and export — the importer manufactures the product and exports it. The export declaration must reference the Drawback Ato Concessório number.
- Closure — after export, the importer closes the Ato Concessório in Siscomex, proving the inputs were used as declared. If the export matches the plan, the tax suspension becomes definitive.
What happens if the buyer doesn't export?
If the Brazilian importer fails to export the finished product within the authorized period:
- All suspended taxes become due immediately, with interest (SELIC rate) from the original import date
- A 0.33% per day fine (up to 20%) applies on the unpaid amount
- The buyer's Drawback privileges may be suspended for future operations
This is why Drawback works best with established exporters who have a track record — not with a company planning to "maybe export later."
How to use Drawback as a sales tool
- Identify export-oriented buyers. If your Brazilian prospect manufactures for export, ask: "Are you using Drawback for your imported inputs?"
- Calculate the real cost. With Drawback, your landed cost is essentially CIF + customs broker fee + logistics — no taxes. Use our calculator to show both scenarios.
- Help with documentation. The Ato Concessório requires detailed product specs. As the supplier, you can provide the technical description and NCM classification that makes the application faster.
- Combine with Ex-Tarifário. For products that don't qualify for Drawback (e.g., capital goods the buyer won't re-export), check Ex-Tarifário as an alternative.
Drawback vs. Ex-Tarifário vs. EU-Mercosur
| Drawback | Ex-Tarifário | EU-Mercosur | |
|---|---|---|---|
| Taxes covered | ALL 6 taxes | II only (0%) | II only (reduced) |
| Requirement | Buyer must export finished goods | No domestic equivalent | EU origin certificate |
| Product scope | Inputs for export products | Capital goods and IT | 91% of EU tariff lines |
| Savings potential | 60-100% of taxes | ~22% of landed cost | Varies by phase-in year |
| Origin | Any country | Any country | EU only |