This mechanism used to be commonly utilized by Brazilian exporters, but the Brazilian Central Bank released Circular 3,580 on March 1st, 2012 bringing the two restrictions below:
1. The shipment of the goods or the rendering of the services had to be made within 360 days as of the receipt of the
financing (i.e., anticipated export revenues). Before Circular 3,580 there was no timing limitation.
2. Pre-export financing had to be contracted only between importer and exporter, i.e., the foreign importer had to be the one anticipating the funds to the Brazilian exporter and also the one receiving the goods.
The changes above brought by Circular 3,580 have significantly reduced the use of the pre-export financing arrangement and thus were strongly criticized by Brazilian exporters.
Recently, the Brazilian Central Bank has taken one step backward and removed the second restriction through Circular 3,604 released on June 28, 2012. Therefore, the 360-day timing limitation remains in force, but as of June 28, 2012 the involvement of a third party in the pre-export financing arrangements is allowed by Central Bank. Thus, funds can be anticipated by a third company (v.g. financial institution) to the Brazilian exporter, instead of the effective importer, and the exemption on WHT is preserved.
For more information, please contact a tax professional with KPMG in Brazil:
, +55 11 2183-3182, email@example.com
, +55 11 2183-3375, firstname.lastname@example.org
, +55 11 2183-3261, email@example.com
, +55 11 2183-6571, firstname.lastname@example.org
, +55 11 2183-3284, email@example.com
, +55 11 2183-3269, firstname.lastname@example.org
, +55 21 3515-9469, email@example.com
, +55 21 3515-9133, firstname.lastname@example.org
, +55 11 2183-3288, email@example.com
, +55 11 2183-3278, firstname.lastname@example.org
, +55 11 2183-1824, email@example.com
, +55 11 2183-6596, firstname.lastname@example.org