The Integrated System for Foreign Operations (Sistema Integra do de Comércio Exterior – SISCOMEX) was enacted by Decree no. 660/92, and the operations using the system were initiated in 1993. SISCOMEX is an electronic interface between the importer/exporter with government agencies involved in foreign trade to guarantee a secure and quick operation.
The SISCOMEX system is used by Brazilian Customs Authorities to control the international commerce. Hence, all importation proceedings must be registered through a Declaration of Importation (DI) in such system. A few years later, Law no. 9,716/98 created the SISCOMEX tax, which is charged whenever a DI is registered in the SISCOMEX system.
The wording of such Law provided that for the registration of an importation, DI tax would be charged in the amount of BRL 30.00 with additional BRL 10.00 for each good added onto the DI. However, the same Law provided that a Decree could adjust the amount charged according to yearly inflation.
The Brazilian Constitution only allows taxes to be created or increased by law and one exception to that rule is in the case of amounts updated according to yearly inflation loss, as it is understood not as a tax increase, but as a measure to adjust the values in accordance with the indexation rate.
However, such decree was only enacted in 2011 by Ordinance 257/11 and provided an increase in the amounts charged. According to the decree, for the DI registration the tax would be increased to BRL 185.00 and for each good added another BRL 29.50 would be due.
As mentioned, the problem with that increase in the tax burden is that the Brazilian legislation only allows tax to be created or increased through Law, «never» by an act of inferior legal hierarchy such as a decree. The only exception is for a mere update in the amounts according to yearly inflation loss.
Thus, the Brazilian Courts are facing disputes whether this increase was in fact a yearly inflation loss update, thus being regular, or, otherwise, being a tax value increase, which would demand the approval of a proper Law.
The Brazilian Government supports the decree stating that the tax value had not been updated for more than 10 years, and that amount represents an adjustment in accordance to the inflation during this period.
The Courts, however, may tend to be favorable to the taxpayers in this situation, since such decree increased the tax burden in more than 600 percent, a value much higher than the inflation loss.
The Brazilian Supreme Court on two separate opportunities has adopted the taxpayer arguments showing a tendency for that position (RE nº 1.095.001 and RE nº 959.274.)
Bearing in mind such context, Brazilian taxpayers, especially the ones with significant amounts of importations, should seek consultancy on whether to file a lawsuit aiming not only to pay the SISCOMEX tax using the prior value, but also to recover the amounts unduly paid in excess for the past 5 years, according to the Statute of Limitations.
Pubished Nordic Light Magazine (NBCC Publication)