What is the ex-tariff regime?
The ex-tariff regime is an exception to Mercosur's Common External Tariff (TEC) that allows for a reduction in import tax for capital goods (BK) and IT and telecommunication goods (BIT that are not produced nationally.
This exception was established by Decision No. 8 of the Common Market Group (GMC) of Mercosur and will be in force until December 31, 2028, which might be renewed.However, the detailed regulation of this regime, including the criteria for its application, still depends on specific regulation by Brazil.

GECEX Resolution No. 512, of August 16th, 2023
GECEX Resolution No. 512, of August 16th, 2023, brought significant changes to the ex-tariff regime in Brazil, especially the criteria for granting this benefit.
These changes were implemented because the government realized that the regime was being misused by importers, which was clear from the large number of products included, many of which were not used.
The main problem was that the old rules were not aligned with the objective of promoting national production, as they created incentives that were contrary to this goal.

What has changed in the ex-tariff regime?
The new rule for the ex-tariff regime has simplified the national production criteria. Now, a product is considered nationally produced if there is a national equivalent that performs the essential functions mentioned in the ex-tariff application. In addition, other factors such as compliance with technical regulations, investments in domestic production, production capacity and the government's industrial policy will also be considered.
These new criteria apply to both new applications and existing ex-tariffs, which can be revoked if they do not meet these criteria as established in GECEX Resolution No. 512 of August 16, 2023.