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Comparing Environmental Policies in Brazil and the U.S.

  Cross-border transactions from Brazilian e-commerce companies To overcome the issues outlined above, merchants must devote time and effort to ensuring that all cross-border obstacles are addressed. Merchants should ensure that their payment gateways can handle foreign transactions and examine the refund process.  Logistics-wise, merchants can employ a cross-docking strategy by selecting brokers to reduce the bureaucracy and logistics of export procedures, as well as exchange and return operations. Forming commercial agreements with important markets might help facilitate clearance.  At the same time, it will strive to assess the challenges faced by businesses existing in Brazil or expanding into global markets. These problems include suffocating bureaucratic procedures, high taxes and complex tax systems, poor distribution infrastructure, a scarcity of talent, political instability, and an unpredictable economic climate. Supplemented with case studies from Netshoes Group and B2W Digi

Economic Policies: Brazil and the United States


 Long Bureaucratic Procedures

Setting up an e-commerce business can be a daunting endeavor. To obtain the National Register of Legal Entities (CNPJ), one must define the category of E-commerce, the company's legal form, the name and corporate name, the social contract, and registration with various government agencies such as the Board of Trade, Federal Revenue Service, State Finance Office, and City Hall. Such onerous restrictions and processes could take up to 90 days to create an E-commerce entity. These structural issues make it difficult for both domestic and foreign businesses to enter the Brazilian market.

Furthermore, Brazil has numerous regulations governing the amount, time duration, and methods for paying taxes. It is extremely difficult to keep track of all taxation rules and legal procedures. This complexity results in a variety of fines and costs being imposed, and depending on the severity of the error, the company may go out of business. Operations are frequently hampered by continuous litigation and lawsuits over a wide range of issues, in addition to the extensive documentation that must be completed. This is incredibly time intensive and especially restrictive in a relatively new industry like e-commerce.

Taxes on E-commerce enterprises in Brazil are classified into two types: taxes on E-commerce items and taxes on E-Commerce services. The tax payable for virtual merchandise sales is a state-owned Tax on Operations Related to the Circulation of Goods and on Services of Interstate and Inter-municipal Transportation and Communication Services (ICMS), while the main tax for E-commerce services is the municipal-owned Tax on Services (ISS). Another factor to examine is the company's structure. If an entity is a micro-individual entrepreneur (MEI), US$ 20 is paid monthly contrasted to the Simples National, where tax is paid at a progressive rate and billed annually. Tax issues are one of the most significant hurdles to E-commerce in Brazil. Taxes are large and numerous, significantly increasing total expenditures. Duties, taxes, and fees can quadruple the initial price of a goods and vary greatly depending on its category. When starting a business, entrepreneurs are predicted to pay 67% of their profits in taxes (EOS Intelligence, 2013). This has the greatest tax load among the BRIC countries. Furthermore, the complex tax structure increases the cost of compensation for lawyers and accountants to negotiate.

The Consumer Defence Code (CDC)

Brazil provides a distinct consumer protection environment: The Consumer Defense Code (CDC), which was founded in 1990, regulates both suppliers and consumers by establishing numerous standards of conduct, terms, and fines. It is regarded as one of the most comprehensive consumer defense systems in the world, which sellers will undoubtedly find challenging due to the stringent and heavily regulated sector.

However, the CDC does not have particular regulations for E-commerce and is structured similarly to door-to-door sales, which can cause uncertainty for entrepreneurs because some restrictions can create scenarios of legal discomfort in the event of consumer ill faith.
One of the key topics of discussion is the consumer's ability to return items within seven days of receipt. Single-use products that cannot be reused, such as food and cosmetics, frequently offer loopholes for consumers who use them in bad faith, i.e., use the product and then return it for a refund.

Another possible source of vulnerability is the order's delivery deadline. Sometimes the E-commerce corporation bears responsibility for carrier delivery delays.
PL 3514/2015 is currently being processed in Congress to amend Law No. 8.078 of September 11, 1990 (Code of Consumer Protection) to improve the general provisions of Chapter I of Title I and Commerce, as well as art. 9 of Decree-Law No. 4,657 of September 4, 1942 (Law of Introduction to the Rules of Brazilian Law). The bill aims to improve the discipline of international commercial and consumer contracts and dispose of non-contractual obligations. The project updates the Consumer Defense Code and the Law of Introduction to Brazilian Law Norms. However, instead of providing more security to entrepreneurs and mediating in a balanced manner, the suggested measures tighten the restrictions and may increase the costs of E-commerce operations.

High taxes and a complex tax structure

Until December 31, 2015, when an order was accepted, money was received, an invoice was issued, and products were packed with the invoice and delivered to the carrier for pickup. This was a quick and agile approach that offered an excellent client experience. In 2015, the National Council for Financial Policy (CONFAZ) announced that in 2016, a new taxing mechanism would be implemented, specifically for e-commerce retailers: Value Added Tax (VAT) will be paid and shared between the states of origin and destination of the goods via a progressive table. When a good is sold from a company in one state to a store in another federal unit, part of the ICMS is sent to the state where the producing company is located, while the other is sent to the state where the final consumer purchases the product; this means that O Caneco's E-commerce business must bear a greater operational and administrative burden. When a request is submitted, it must be assessed to determine which state the items will be transported to, compute the ICMS difference, visit the destination state's revenue site, and provide a guide for collecting the ICMS difference from the destination state. It is necessary to manually fill out all forms with data from the issuer, customer data such as CPF address, and so on, in addition to entering the 44-digit Nota Fiscal access key. However, due to periodic network problems, not all state income sites are available, and each has a distinct usability, delaying the collection process. Furthermore, 21 of the federation's 27 states collect a Poverty Fund tax (Fundo de Combate a Pobreza), which averages 2%, necessitating the creation of a new collection guide for each of these states' requests.


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