Brazil's AFRMM: What Importers Pay on Ocean Freight
Brazil's AFRMM is an 8% levy on ocean freight since the BR do Mar law. Learn the tax base, who pays, when to pay, and which imports qualify for exemption.
Every cargo shipment unloaded at a Brazilian port triggers a federal contribution called the AFRMM (Adicional ao Frete para Renovacao da Marinha Mercante, or the Additional Freight Charge for the Merchant Marine Renewal Fund). Law 14.301/2022, known as BR do Mar, cut the long-haul rate from 25% to 8%, which reduced the AFRMM’s weight in the total cost of importing into Brazil. The tax base, however, remains the full remuneration of waterborne transport, a concept that includes charges not listed as “freight” on a forwarder’s quote. An importer who estimates the AFRMM by applying 8% only to the ocean freight line will find a gap when the Mercante system billing arrives.
The AFRMM is a federal contribution on waterborne transport
The AFRMM dates back to 1958 and is governed by Law 10.893/2004, as amended by Law 14.301/2022. Revenue goes to the Merchant Marine Fund (FMM), which finances the construction and modernization of Brazilian-flagged vessels. The taxpayer is the consignee of the cargo, and on an import shipment the consignee is the Brazilian importer.
The freight forwarder or carrier collects the AFRMM from the importer together with the freight charges and remits it through ANTAQ’s Mercante system, linked to the CE Mercante (electronic bill of lading record) for each shipment. The importer pays, but the forwarder or the carrier’s agent in Brazil handles the actual collection.
The taxable event is the start of cargo discharge at a Brazilian port. On long-haul navigation, which covers all cargo arriving from abroad, the AFRMM applies to every shipment regardless of the Incoterm agreed between buyer and seller. Under a CIF purchase, where the exporter contracts and pays for ocean freight, the Brazilian importer still owes the AFRMM. The levy is tied to discharge in Brazil, and the tax liability falls on the Brazilian consignee.
How to calculate the AFRMM on long-haul imports
The calculation depends on two elements: the rate and the tax base. For an importer bringing cargo from overseas by sea, the relevant navigation type is long-haul.
Law 14.301/2022 (BR do Mar) cut the AFRMM rate on long-haul navigation from 25% to 8%. For cabotage (domestic port-to-port shipping within Brazil), the rate is also 8%. For river and lake transport of liquid bulk in Brazil’s North and Northeast regions, the rate remains 40%. An importer bringing goods from China, Europe, or the United States into Santos, Paranagua, Itajai, or any other Brazilian port applies the 8% rate.
The tax base is the remuneration of waterborne transport, as defined in Law 10.893/2004. This goes beyond the figure listed as “ocean freight” on a forwarder’s quote. The remuneration includes port-to-port freight plus cargo handling charges linked to the transport service. Handling charges billed by the carrier at the port of origin or destination, when they form part of the ocean transport remuneration, are included in the AFRMM base.
What stays out of the base: the THC (Terminal Handling Charge) billed by the port terminal in Brazil for moving the container at the quay, bonded warehouse storage, stevedoring, and import duties and taxes (Import Duty, IPI, PIS/COFINS on imports, ICMS). These costs are part of the total landed cost but are not remuneration of waterborne transport, so they do not enter the AFRMM calculation.
An FCL import from China to Santos with freight of USD 2,500 per container and carrier handling charges of USD 300 illustrates the math. At an exchange rate of BRL 5.60 per dollar on the Mercante payment date, the tax base is USD 2,800, or BRL 15,680.00. The AFRMM at 8% comes to BRL 1,254.40. If the importer had applied 8% only to the USD 2,500 ocean freight (BRL 14,000.00), the result would be BRL 1,120.00, a difference of BRL 134.40 per container. Over ten containers in a year, the cumulative gap exceeds BRL 1,300.
When freight is denominated in a foreign currency, the AFRMM is converted to Brazilian reais at the Sisbacen exchange rate on the payment date. During periods of currency volatility, the AFRMM amount in reais can shift between the date the importer received the forwarder’s quote and the date of actual payment in the Mercante system.
Payment happens in the Mercante system before customs clearance
The Mercante system, maintained by ANTAQ (Brazil’s National Waterway Transport Agency), is where the AFRMM is collected. Every ocean bill of lading arriving in Brazil must be registered as a CE Mercante before the cargo reaches port. The carrier or its maritime agent registers the CE Mercante with the shipment data (consignee, freight value, cargo description, origin and destination ports), and the system generates the AFRMM payment slip.
AFRMM payment is a prerequisite for filing the import declaration. Without payment, or without proof of exemption or suspension in the Mercante system, the customs broker cannot register the DUIMP (Brazil’s single import declaration), and customs clearance does not begin. A delay in AFRMM payment therefore delays the start of clearance, extends the cargo dwell time at the bonded terminal, and accumulates storage charges day by day.
For LCL imports (loose cargo consolidated with other shipments in the same container), the AFRMM is calculated on the house B/L freight, which is the bill of lading issued by the consolidating forwarder for each importer. The master B/L, issued by the carrier, covers the full container. The forwarder handling the deconsolidation collects the AFRMM from the importer based on the house freight.
Which imports qualify for AFRMM exemption or suspension
Brazilian law provides for situations where the AFRMM is waived or can be recovered. Importers operating under one of these regimes must request the benefit in the Mercante system before filing the DUIMP.
Drawback is the most relevant regime for companies that import raw materials to manufacture export goods. Drawback suspension allows the AFRMM to be suspended for the duration of the drawback act, waiving payment at the time of import. Drawback exemption allows replenishment of inputs already used, with AFRMM exemption on the replacement import. In both cases, the drawback concession act must be active and linked to the shipment in the Mercante system.
Goods destined for the Manaus Free Trade Zone or the Free Trade Areas in Brazil’s North region (Tabatinga, Macapa, Santana, Boa Vista, Bonfim, Pacaraima, Guajara-Mirim, Brasileia, and Cruzeiro do Sul) are exempt from the AFRMM. The request is filed in the Mercante system and requires documentation proving the cargo’s final destination.
RECOF (Brazil’s Special Customs Regime for Computerized Industrial Warehousing) also provides for AFRMM suspension on inputs imported under the regime, with a commitment to export the finished product.
Goods imported under temporary admission, which enter the country for a set period and will be re-exported, may qualify for proportional AFRMM suspension.
In every one of these regimes, the benefit must be requested before the import declaration is filed. An importer who registers the DUIMP without first requesting exemption or suspension in the Mercante system pays the full AFRMM and must then seek a refund from Brazil’s Federal Revenue Service through an administrative process that can take over 60 days.
Where the AFRMM fits in the total cost of importing by sea
The AFRMM is one of several charges that make up the logistics cost of a maritime import, and confusion with other port-related expenses is common among importers new to the process. A typical FCL import involves, beyond the goods value, a sequence of logistics costs that accumulate before and during customs clearance.
Ocean freight is the port-to-port transport charge, negotiated between the importer (or the freight forwarder) and the carrier. Surcharges (BAF, bunker, ISPS, peak season surcharge) are additions to the freight that vary by trade lane, carrier, and season. The AFRMM is calculated on the freight and transport-related handling charges and paid to the Brazilian federal government through the Mercante system. The THC is billed by the port terminal for container handling at the quay and goes to the terminal operator, not the government. Bonded warehouse storage is charged by the facility where the cargo remains until clearance, calculated by weight and by tier of days. Stevedoring is the cargo handling service inside the bonded facility.
After clearance, the importer pays import duties and taxes (Import Duty, IPI, PIS/COFINS on imports, ICMS) plus the fees of the customs broker and freight forwarder.
An importer comparing quotes from different forwarders should check whether the AFRMM is included in the total or listed separately. Some forwarders include an estimated AFRMM in the quote; others list only the freight and surcharges and note that the AFRMM will be billed separately based on the Mercante payment slip. Comparing two quotes only works when both figures cover the same items.
Frequently Asked Questions
Does the AFRMM apply to air freight imports?
The AFRMM applies exclusively to waterborne transport. Air freight imports do not generate AFRMM. The taxable event is the discharge of cargo transported by sea, river, or lake at a Brazilian port. Cargo arriving in Brazil by air, through airports like Viracopos or Guarulhos, is not subject to the AFRMM.
Does the AFRMM enter the ICMS tax base on imports?
Whether the AFRMM is included in the ICMS (state value-added tax) base on imports is a disputed matter in Brazil. Some states include the AFRMM in the ICMS base, arguing that it forms part of the total import cost. Court rulings have gone both ways. Importers should consult the tax legislation of the state where clearance occurs and seek specific tax advice when in doubt.
Can an importer request a refund of overpaid AFRMM?
When the amount paid in the Mercante system exceeds what was actually owed, due to an error in the tax base or in the currency conversion, the importer can request a refund from Brazil’s Federal Revenue Service. The request follows the procedures of Normative Instruction RFB 1.412/2013 and must include the Mercante payment receipt and a demonstration of the correct amount. For payments made from May 2014 onward, the Federal Revenue Service has jurisdiction.
How Tier2 Cargo tracks the AFRMM in the shipment cost
Tier2 Cargo records the AFRMM as a dedicated line item within each import shipment, separate from ocean freight and other port charges. The tax base, rate, and CE Mercante number are linked to the shipment record, and the AFRMM value feeds into the system’s three-stage margin view: estimated at quoting, invoiced to the importer, and realized at settlement. When the forwarder passes the AFRMM through to the importer, the charge appears as a line on the invoice and on the cost breakdown that the business partner can access through Tier2 Portal, where every cost item is visible without calling the operations team.
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