The Brazilian Federal Revenue’s Normative Instruction no. 327 dated May 9th, 2003, sets out that during the customs value determination, the discharge, handling, and appraisal of goods expenses at the ports must be included in the tax base of the import tax.

The Federal Revenue´s Inspection Team has been adopting the position that the expenses related to customs charges/port handling services, comprising the receipt, appraisal of goods, internal transport, opening of volumes for customs examination, handling, stowage, and delivery, as well as loading and unloading of goods from vessels are all included in the customs value determination. However, such interpretation does not consider that according to article 77 of the Customs Regulations (Decree Nº 6759 of 2009) only the expenses related to the cargo, discharge/unloading and handling associated to the transport of the imported merchandize until the arrival at the bonded facilities must be included in the customs value.

This controversy was brought to the Judiciary Branch having the First Panel of the Superior Court of Justice (STJ) decided by three votes to two, on special appeal (REsp no. 1.239.625 /SC) that the customs charges/port handling services expenses must be excluded from the customs value determination, duly ratifying the appellate decision rendered by the Regional Federal Appellate Court (TRF) of the Fourth Region.

Even though the Treasury Office may still appeal this decision, this represents a quite important decision for the taxpayers which we will continue to monitor closely.