Understanding duties and taxes

This article covers

• The fundamental differences between tariffs and duties in international trade

• How the Receita Federal calculates import taxes on inbound corporate cargo

• Structural strategies to manage Landed Costs and destination customs assessments

• Leveraging digital trade platforms to streamline international shipping billing options

Operating a growing e-commerce storefront or SME in Latin America's largest digital economy offers immense scale, but cross-border expansion requires strict cost transparency.

For Brazilian businesses utilizing logistics integrations on platforms like VTEX or Nuvemshop, unexpected fiscal fees at the border can quickly devastate thin product margins. Failing to map out international shipping duties and taxes beforehand can lead to packages getting held up at customs or buyers abandoning their orders at delivery.

In this guide, we will break down exactly how border authorities evaluate commercial shipments, how global duties are calculated, and how your team can establish an accurate pricing strategy from day one.

What is the difference between a tariff and a duty in international shipping?

The words “tariff” and “duty” are often used interchangeably in global logistics, and both function as forms of indirect taxation levied on cross-border items. When discussing macroeconomic policy or government trade agreements, the term “tariff” is generally utilized by regulatory bodies.

Tariffs are strategic fiscal barriers established to protect domestic manufacturing markets while simultaneously generating revenue for the state treasury. Conversely, when talking about specific financial rates or transactional fees applied to an invoice, the term “duty” is generally used.

TARIFFS VS. DUTIES IN CROSS-BORDER COMMERCE

• TARIFF: Macroeconomic trade tax applied by a nation to broad product categories to protect local industries and manage international trade volume.

• DUTY: Microeconomic consumption tax applied to a specific individual shipment, calculated directly from the item's harmonized commodity code.

A duty is a specific, legally binding tax levied by government authorities on imported and exported goods moving across international borders. The calculation of these individual duties is dependent on the declared commercial value of the specific commodities contained within the shipment.

Duties are officially applied by customs authorities—such as U.S. Customs and Border Protection or Europe's national customs offices—at the time of initial border entry.

The precise financial percentage varies depending on the product’s standardized classification code, its total transaction value, its confirmed country of manufacture, and the associated freight charges for the commodities involved.

How does the Receita Federal calculate duties and taxes inside Brazil?

The Receita Federal (Brazilian Federal Revenue) calculates import duties and internal taxes based on the comprehensive CIF (Cost, Insurance, and Freight) value of the incoming shipment, rather than the standalone product price. When foreign inventory enters Brazil, customs authorities utilize a cascading tax structure that aggregates multiple fiscal layers.

This calculation includes the base Import Tax (Imposto de Importação - II), the Industrialized Products Tax (Imposto sobre Produtos Industrializados - IPI), and the state-level Goods and Services Tax (Imposto sobre Circulação de Mercadorias e Serviços - ICMS).

According to analytical data from SEBRAE, unexpected import tax assessments are a primary cause of supply chain disruptions for local small businesses importing raw components or samples.

Because the cascading application of ICMS multiplies across the preceding federal taxes, the final cumulative tax rate on a standard B2B entry can easily exceed 60% to 100% of the original invoice amount.

For your business to safely import manufacturing materials or inventory, your fulfillment team must utilize accurate Nomenclatura Comum do Mercosul (NCM) codes within local ERPs like Bling or Tiny to pre-calculate these statutory obligations before booking any freight.

What qualifies an international shipment as dutiable or non-dutiable?

Each sovereign country establishes its own distinct regulatory standards to determine whether an international shipment is categorized as a document or a non-document item.

This division is a critical factor because documents are generally considered non-dutiable, whereas non-documents are structurally classified as dutiable. In most global trade lanes, packages containing text documents that do not possess any independent commercial value are exempt from duties at the border.

However, any physical paper assets that hold inherent commercial worth are treated as standard merchandise and are subject to full customs duties.

For your business to ensure smooth border transitions, your dispatch team must recognize what triggers a dutiable assessment:

• Non-Dutiable (Documents): Standard business contracts, corporate reports, banking statements, and administrative paperwork that cannot be resold.

• Dutiable (Non-Documents / Goods): Retail products, machinery components, clothing samples, and digital media storage devices.

• Commercial Documents: Architectural blueprints, certified software printouts, and collector manuscripts carry commercial value and are treated as standard dutiable goods.

How can businesses manage payment structures for international duties and taxes?

Payment of customs duties and destination import taxes is legally the standard responsibility of the package receiver. To help expedite the physical delivery of your cross-border orders and prevent packages from getting stuck in long warehouse queues, international express carriers can contact the receiver directly on behalf of customs authorities to arrange for immediate electronic payment.

This financial step can be completed easily by your customer via a secure digital payment link transmitted directly to their smartphone or inbox.

When you organize your cross-border shipments within your digital dashboard, you can choose between two main billing options to control the customer experience:

1. Duties & Taxes Unpaid (DTU / DAP): This standard option transfers all border costs directly to your customer. Customs calculates the taxes at the entry terminal, and the carrier contacts the buyer to collect payment before delivering the parcel. This is common for standard e-commerce, but you must explicitly warn your customers about potential border fees at checkout to prevent delivery rejections.

2. Duties & Taxes Paid (DTP / DDP): This option lets your business absorb all destination customs fees. The carrier calculates the estimated entry costs upfront and bills them directly to your corporate account, allowing the package to go straight to final delivery without contacting the receiver. This is a valuable strategy for high-end B2C brands and critical B2B components where a seamless, surprise-free delivery experience is paramount.

To simplify these calculations, your company can utilize specialized platforms like MyGTS (My Global Trade Services) to estimate total Landed Costs—including freight rates, international duties, and localized VAT—before generating your shipping labels.

Navigating cross-border compliance accurately helps your enterprise build international trust and scale securely across global markets.

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