The Brazilian Supreme Court ruled that the Brazilian Internal Revenues Service (IRS) can retain the goods exported to Brazil when the price informed by the importer is less than the real cost of the products.
Until now, when this happened the products would be freed but, in parallel, the IRS would start an administrative procedure to examine the case and possibly charge the actual tax owed.
But from now on, the IRS can keep the products until the correct tax is paid, in addition to a penalty fee that can be charged up to 150% the value of the tax.
It is not clear what could be understood as the “real cost of the products” by the IRS. Which can bring uncertainty for both parties.
It is important, therefore, for sellers and buyers to include in the sale contract provisions of responsibilities and indemnification when such events affect the business operations.