As Liziane Angelotti Meira and Daniela Floriano identified very nicely i “Are we going to speak about tax classification of products?” [1]“within the Brazilian authorized setting, […] it’s verifiable proper scientific negligence in line with content material [da classificação fiscal de mercadorias]”. “He’s typically launched to a activity automated or so essential portrayed by numerous actors from mental authorized operators, supported by the preliminary literature, which functioned primarily to breed, the letters themselves, laws. In the identical manner, the manufacturing of jurisprudence, regardless of a big evolution, nonetheless exhibits some mental disregard.”
Subsequently, following the commentary of distinguished writers, this textual content intends to emphasise the necessity to acknowledge the strict authorized nature of the tactic of tax classification of products.
Firstly, the relevance of this matter needs to be highlighted in that the definition of the IPI charge (Industrial Merchandise Tax) and Import and Export Taxes (Customs Taxes) depends upon it, in addition to differentiated tax regimes and even tax advantages granting the prior and enough tax classification of products and their subsequent classification in intensive tables containing, actually, 1000’s of things and sub-items. [2]
At first look, it could appear that, based mostly on the technical description of an merchandise offered by a specialist, it’s ample to look at the Tipi or the CCE Desk seeking the outline most appear to reply on to tax functions. classification. Nevertheless, this can be a utterly misguided process given the principles governing the Harmonized Commodity Classification System, as defined beneath.
The Harmonized Commodity Classification System is a system Worldwide which goals to standardize the remedy of products for worldwide commerce functions because of the Brussels Worldwide Conference of June 14, 1983, signed by the Federal Republic of Brazil and launched into our authorized system by Decree No. 97.409/1988, with the appliance of extraordinary regulation.
Below this conference, all items topic to worldwide commerce by the signatory nations have to be categorized in line with the next minimal construction:
-00(1)00(2)00(3), being:
(1) Chapter (the primary 2 digits of the SH);
(2) Submit (the primary 4 digits of the SH);
(3) Subheading (the primary 6 digits of the SH).
Nevertheless, the Brussels Conference additionally authorizes the adoption of things and sub-items based mostly on regional necessities, which had been, furthermore, accepted throughout the scope of Mercosur, with the next construction by the Mercosur Widespread Nomenclature – NCM as given on:
-00(1)00(2)00(3)0(4)0(5), being:
(1) Chapter (the primary 2 digits of the SH);
(2) Submit (the primary 4 digits of the SH);
(3) Subheading (first 6 digits of the HS);
(4) Merchandise (seventh digit of the NCM);
(5) Sub-section (eighth digit of the NCM).
Nevertheless, greater than standardizing the way in which during which merchandise classification codes needs to be offered, the Brussels Conference (bear in mind, adopted in Brazil by utility of widespread regulation) offered for technique of classifying an merchandise, which comprises an evaluation of the positions and subheadings of the Harmonized System and their respective numerical codes, in addition to the Part, Chapter and Subheading Notes, along with the Common Guidelines for the Interpretation of the Harmonized System (RGI ), which is within the Annex to the Conference itself, which, in line with its artwork. 2nd, it have to be thought-about an integral a part of it.
reproduce
As well as, the Harmonized System Interpretation Requirements (Nesh) deserve consideration, which “a sub-element of a basic nature to accurately mirror the content material of the positions and sub-headings, along with the Notes on Part, Chapter, positions and sub-headings of the Harmonized System of Nomenclature, annexed to the Worldwide Conference of the identical title“in accordance with the person paragraph of Article 1 of Decree No. 435/1992.
As well as, the classifications of products contained within the Opinions of the World Customs Group (WCO), transferred and internalized by the motion of the Federal Secretary of Income, are additionally binding. [3] The Consultative Resolutions and the Variety Resolutions issued pursuant to article 33 of the normative RFB Directive No. 2,057/2021[4]that are binding on the Income Commissioners themselves and “help the taxpayer who implements them, even when it isn’t the respective advisor, so long as the merchandise suits the traits described within the menu, with out prejudice to the verification of its efficient classification by the tax authority in customized audit occasion“.
What we need to emphasize instantly is that, in reality, the exercise, in itself, of classifying items is a authorized interpretive exercisethough it’s based mostly on specialised technical data concerning the characterization of every commodity.
Certainly, let’s examine, as a primary approximation, the content material of the Common Guidelines for the Interpretation of the Harmonized System (RGI):
Part, Chapter and Sub-Chapter titles are for indicative functions solely. For authorized functions, classification is set by the texts of the positions and Part and Chapter Notes and, so long as they aren’t opposite to the texts of these positions and Notes, by the next Guidelines:
a ) Any reference to an article in a selected location covers that article, even incomplete or unfinished, offered that it provides, in its present state, the important traits of the whole or completed article. It additionally covers the entire article or the completed article, or is deemed to be so below the phrases of the previous provisions, even whether it is disassembled or disassembled. b) Any reference to materials in a selected location refers to that materials, whether or not in its pure state, or blended or related to different supplies. Likewise, any reference to a piece of specific subject material covers a piece consisting in complete or in a part of that subject material. The classification of such blended merchandise or composite items is made in accordance with the ideas set out in Rule 3.
The place it seems that the products might be categorized in two or extra places because of the utility of Rule 2 b) or for every other motive, the classification have to be made as follows: a) The situation is extra particular prevailing over the extra generic ones. Nevertheless, the place two or extra headings refer solely to among the parts of a blended product or composite article, or to one of many parts of a set put up for retail sale, these headings should contemplate whether or not of them, in relation to. these merchandise or items, equally particular, even when considered one of them provides a extra correct or full description of the merchandise. b) Blended merchandise, works made up of various supplies or made up of a mix of products and completely different items offered in units put up for retail sale, which can’t be categorized, are categorized in line with their substance completed by making use of Rule 3a. or an article which provides them the mandatory attribute, when this choice might be made. c) In instances the place Guidelines 3 a) and three b) don’t permit classification, the merchandise is assessed in the latest place within the numerical order, amongst these that may be validly included.
Unclassifiable gadgets are categorized by making use of the Guidelines set out above within the location equivalent to essentially the most related gadgets.
Along with the earlier provisions, the articles talked about beneath are topic to the next Guidelines: a) Circumstances for cameras, musical devices, weapons, drawing devices, jewellery and related articles, specifically manufactured for an article or selection be particular, and inclined. 648/2012 Textual content related to the EEA of long-term use, when the products for which they’re meant are given, they’re categorized as these items, so long as they’re of the kind usually bought with these items. This Rule, nonetheless, doesn’t apply to articles which give the set its primary character. b) With out prejudice to the provisions of Rule 5 a), packaging containing items is assessed because the latter when they’re of the kind usually used for his or her packaging. Nevertheless, this provision will not be necessary the place it’s clear that the packaging can be utilized repeatedly.
The classification of products in sub-headings of the identical heading is set, for authorized functions, by the texts of those sub-headings and the respective sub-heading notes, in addition to, mutatis mutandis, by the earlier Guidelines, on the understanding that there isn’t any however subheadings of the identical. comparable stage. Inside the that means of this Rule, the Part and Chapter Notes are additionally relevant, until in any other case offered.
As a fast examination exhibits, though it’s listed in 6 numbers, it’s a bigger algorithm that present a pretty big complexity.
With out the least consideration of the matter, consideration is drawn to the primary and most essential of the principles, particularly, “The titles of the Sections, Chapters and Subchapters have solely an indicative worth. For authorized functions, the texts decide the classification of Posts e Part and Chapter Notes […]“
However, you will need to mix this rule, RGI 1, with RGI 6, in line with which “the classification of products within the subheadings of the identical heading is set, for authorized functions, with the texts of those subheadings and the Subheading Notes respectively, in addition to, ‘mutatis mutandis’, in accordance with the earlier Guidelines, being understood solely subheadings of the identical stage are comparable […]“.
Subsequently, in actuality, there’s a hierarchy between positions, sub-headings, gadgets and sub-items — to repeat, solely positions might be in comparison with different positions, sub-headings to sub-headings and so forth.
Subsequently, the aforementioned process of looking, amongst all of the descriptions contained in TipiI or CCE, for the one which appears to be extra particular to the merchandise whose classification is sought, is inaccurate. That is proper, first, if you wish to match the merchandise within the extra particular location. As soon as the location is outlined, search among the many sub-headings, gadgets and sub-items, evaluating them with different descriptions of identical stage.
As well as, this simplistic process of attempting solely an merchandise or some sub-item that appears to be essentially the most particular, as already acknowledged, is definitely improper, as a result of it provides ignoring the complete normative framework that isn’t solely associated to the 6 paragraphs. RGI, but in addition the texts of the Place, the Part, the Chapter and the Subsidiary Notes, the Nesh, the opinions of the OMA and the Federal Income Service’s personal Advisory and Variety Resolutions.
As is evident, the tax classification of products is a authorized exercise in itself, regardless of being advanced, as a result of it includes the examination of an intensive normative framework, typically written within the language of worldwide treaties, completely different from the one used often at house. Legislation. Complexity, nonetheless, doesn’t exempt the interpreter from his function in making use of present requirements.
________________________________________________
[1] Obtainable at: Obtainable on 16-06-2024.
[2] These are, respectively, very well-known IPI – TIPI deskat the moment connected to Decree no. 11,158/2022 and Mercosur Exterior Tariff Desk – TEC, adopted because of the 1991 Asunción Treaty, and periodically reviewed by CAMEX resolutions. Each stem from the NCM – the so-called Widespread Denomination of Mercosur.
[3] In the intervening time, they’re in SRF Regular Instructing No. 2,171, dated 01/02/2024.
[4] See additionally RFB Order No. 1,921/2017, which established the Items Tax Classification Middle (Ceclam).