The development of trade cooperation between the BRICS countries faces serious administrative barriers. Despite the impressive volumes of mutual trade, which reached one trillion dollars by the end of 2024, businesses continue to face a complex system of customs regulation and taxation in different jurisdictions.
The main problem is the lack of a single free trade agreement within the association. Unlike the European Union or the EAEU, where unified rules apply, each BRICS country applies its own tariffs and tax requirements. This creates additional difficulties for companies engaged in foreign economic activity.
For Russian importers purchasing goods in the BRICS countries, the main fiscal burden arises in Russia. The standard set of payments includes import customs duty, value added tax and, in some cases, excise taxes. The amount of the duty varies depending on the product category and can range from zero to several tens of percent of the cost of the product.
Value added taxation deserves special attention. The standard rate of 20% is applied for imports, but for socially important goods such as food, children's goods and medical products, a preferential rate of 10% applies. To avoid double taxation, the BRICS countries provide various benefits to exporters. For example, in Brazil, exports are exempt from VAT, while in China, India, South Africa and the United Arab Emirates, the zero rate of this tax is applied.
For Russian exporters, the situation looks mirrored. When goods are exported outside the EAEU, an export customs duty is paid, the amount of which depends on the specific type of product. VAT on exports can be applied at a zero rate, but for this it is necessary to provide the tax authorities with a complete package of documents, including a contract with a foreign counterparty and a customs declaration with notes on the actual export of goods.
The greatest difficulties await businesses when importing goods to the BRICS countries. Customs duties here can reach very significant amounts. For example, in Brazil, the total tax burden on imports reaches 50-100%, in South Africa, standard duties reach 45%, and taking into account anti-dumping measures, they can increase up to 150%. In Iran, customs duties amount to 55% of the cost of goods.
At the same time, preferential treatment is also available in some countries. Last year, China reduced duties on critical equipment, medical products and certain types of agricultural products. In India, most tariffs range from 5-10%. Certain preferences are provided within the framework of bilateral agreements — for example, the free trade agreement between the EAEU and Iran reduces the average duty rate from 20% to 4.5%.
In addition to the tax aspects, businesses are faced with the need to comply with additional regulatory requirements. In some BRICS countries, particularly in India and China, imported goods are subject to mandatory licensing. In some cases, it may be necessary to establish a local legal entity in order to conduct business, which entails additional administrative and tax obligations.
Experts note that when planning foreign economic activity with the BRICS countries, it is necessary to carefully analyze not only customs tariffs, but also the specifics of the tax systems of each jurisdiction. Agreements on the avoidance of double taxation, which Russia has concluded with almost all the countries of the association, play an important role. These documents make it possible to reduce the tax burden, for example, to reduce the tax rate on dividends to 5-10%.
Transfer pricing issues deserve special attention. Tax authorities both in Russia and in other BRICS countries carefully check the compliance of prices in transactions between interdependent companies with market indicators. Violations in this area can lead to significant additional taxes and fines.
The prospects for trade facilitation within the BRICS are linked to the development of bilateral and multilateral agreements. The recently signed economic partnership agreement with the UAE provides for mutual tariff reductions for a wide range of goods. Similar initiatives are being discussed with other countries of the association.
In the current conditions, businesses are recommended to pay special attention to documenting foreign economic transactions, carefully check tariff preferences and comply with reporting deadlines. Professional tax consulting and knowledge of the specifics of each jurisdiction are becoming critical success factors in trade with the BRICS countries.
