A import on account It is one of the most common methods used by companies that want to import goods without having to set up an in-house foreign trade operation.
While this approach offers convenience, operational benefits, and access to the expertise of specialized companies, it also requires extra attention to tax, customs, and accounting matters.
Many managers have only a superficial understanding of the concept and end up confusing the import on consignment versus import on order.
Although both are forms of indirect importation, there are important differences regarding ownership of the goods, tax liability, and classification under the Receita Federal.
In this article, we will explain how importation on behalf of and on order works, what its benefits are, what risks need to be considered, and how specialized accounting helps ensure the operation’s compliance.
What is import on account?
A import on account This occurs when a contracting company, known as the importer, uses a licensed importer—usually a trading company—to handle the import procedures on its behalf.
In this arrangement, the goods belong to the buyer from the outset of the transaction. The trading company acts solely as a provider of foreign trade services, performing activities such as:
- Operational import negotiations;
- Arranging international freight;
- Logistics coordination;
- Customs clearance;
- Compliance with customs obligations;
- Nationalization of the goods.
Although the import declaration is filed by the trading company, the actual economic owner of the goods is the purchasing company.
For this reason, the law requires full transparency in identifying those involved in the transaction.
Legal basis for importation on behalf of and at the request of
The main regulation governing this matter is the RFB Normative Instruction No. 1,861/2018, which governs import transactions carried out on behalf of and at the request of a third party and on consignment.
The regulation establishes the criteria for classifying each category, the obligations of the parties involved, and the procedures necessary to ensure compliance with tax and customs regulations.
A Internal Revenue Service requires that both the trading firm and the acquirer be properly licensed and that the transaction be clearly recorded in the official systems.
The goal is to prevent irregular practices that could conceal the true importer or hinder enforcement.
Spreadsheet
Invoice template
How does importation on behalf of and at the request of a third party work in practice?
To better understand the model, imagine a Brazilian company that wants to import machinery from Asia.
The company has the financial resources to purchase the equipment, but lacks the specialized internal infrastructure to carry out the international operation.
In that case, she hires a licensed brokerage firm. The process typically proceeds as follows:
- The buyer negotiates the purchase of the merchandise.
- The trading company is hired to handle the import.
- The funds used for the acquisition belong to the purchaser.
- The trading company records the import transaction.
- Customs clearance has been completed.
- The merchandise is delivered to the buyer.
Although the trading company is formally involved in certain stages of the transaction, it is not the actual purchaser of the goods. Its role is limited to provision of foreign trade services.
What is the difference between importation on behalf of and on order and importation by order?
This is one of the most frequently asked questions among managers working in international trade.
Despite their operational similarities, the two formats have quite distinct characteristics.
Import on account
In Import on behalf of and at the request of:
- The acquirer provides the financial resources;
- The goods belong to the purchaser from the outset;
- The trading firm acts as a service provider;
- The buyer is formally identified in the transaction.
Import to order
In Import on demand:
- The trading firm uses its own funds to import;
- The goods are initially purchased by the importer;
- The product is then sold to the customer;
- The initial commercial risk lies with the importer.
This difference is extremely important because it directly affects the tax treatment and legal liabilities of the parties.
What are the responsibilities of the trading department?
Although she is not the economic owner of the goods in the import on consignment, The trading division has significant responsibilities.
Among them:
- Comply with customs regulations;
- Properly file the import declaration;
- Identify the actual purchaser of the goods;
- Keep supporting documentation;
- Comply with Federal Revenue Service requirements;
- Ensure operational compliance.
Trading operations require a high level of document control, as any inconsistency can lead to tax audits.
Therefore, the choice of a partner company must be made with great care.
What are the acquirer's responsibilities?
The purchaser also has important obligations. The Internal Revenue Service considers that he is the actual economic importer of the transaction.
Therefore, it is the company’s responsibility to:
- Provide the funds for the purchase;
- Verify the source of the funds;
- Keep records of the operation;
- Properly record the acquired assets;
- Comply with tax and accounting obligations related to imports.
The acquirer’s active participation is essential to ensuring the transaction proceeds smoothly. This is not simply a matter of completely outsourcing responsibility.
Are there tax benefits to importing on behalf of and at the request of another party?
Although many companies turn to this approach for operational reasons, it can also offer strategic benefits.
Among the main ones are:
Leveraging specialized expertise – The trading firm has technical expertise in:
- Tax classification;
- Customs procedures;
- Licensing;
- International logistics;
- Special schemes.
This reduces operational errors that can lead to unnecessary tax costs.
Improved management of tax credits – A properly structured operation makes it easier to identify and utilize ICMS, IPI, PIS, and Cofins credits when permitted by law.
Reducing compliance risks – The involvement of specialists reduces the likelihood of tax and customs discrepancies.
This provides greater security for companies that do not have their own foreign trade department.
Operating income – Outsourcing the operation allows the company to focus its efforts on its core business.
What is fraudulent third-party intervention?
Among all the risks associated with indirect imports, fraudulent intermediation deserves special attention. This is one of the areas most closely monitored by Receita Federal.
Fraudulent fronting occurs when a company is used to conceal the true importer of the transaction. In practice, the IRS considers this to be an attempt to conceal the identity of the party that actually carried out the import.
The consequences could be severe.
Among them:
- Hefty fines;
- Loss of goods;
- Suspension of licenses;
- Administrative proceedings;
- Tax inquiries.
Therefore, all transactions must be conducted with full documentary transparency. The buyer’s identity must be clear and consistent with the economic reality of the transaction.
What are the most common errors that lead to fines in agency trading?
A number of issues can put the operation at risk. Among the most common are:
Lack of proper documentation: Poorly drafted contracts or a lack of supporting documents often raise questions.
Financial discrepancy: When the funds used cannot be clearly linked to the purchaser, there is a risk that the transaction will be deemed irregular.
Incorrect tax classification: Errors in the tax classification of products can result in significant tax differences.
Accounting inconsistencies: Improper accounting for imports often draws the attention of regulatory agencies.
Inappropriate choice of trading strategy: Companies lacking the necessary infrastructure, experience, or compliance may expose their customers to unnecessary risks.
When does importation on behalf of and at the request of another party make the most sense?
A import on account is often particularly beneficial for companies that:
- They are launching international operations;
- They do not have their own foreign trade department;
- They want to import more efficiently;
- They are seeking specialized technical support;
- They need logistical and customs support.
Manufacturers and retailers often use this model to streamline their operations and reduce administrative complexity.
On the other hand, companies with a large volume of imports and a well-established infrastructure may consider other strategic alternatives.
The decision must take into account operational, tax, and financial factors.
The Role of Accounting in Import Compliance
Many managers view accounting as merely responsible for maintaining the company’s financial records. In reality, its role is much more strategic.
One specialized accounting in foreign trade contributes to:
In addition, it facilitates integration among the tax, financial, customs, and operational sectors.
This integrated approach is essential for companies seeking sustainable growth in international trade.
How do you set up a secure import operation on a consignment basis?
The safety of the operation depends on a combination of various factors.
Among the key recommendations are:
- Choose a brokerage firm with a solid track record;
- Draw up detailed contracts;
- Keep documentation organized;
- Ensure financial transparency;
- Correctly validate the tax classification;
- Monitor applicable taxes;
- Have access to specialized accounting support.
The greater the volume of imports, the greater the importance of robust governance and compliance processes.
Conclusion
A import on account It is an extremely valuable tool for companies that want to enter the international market without having to deal with all the operational complexities of foreign trade.
When properly structured, it offers significant advantages in terms of operational efficiency, regulatory compliance, and leveraging the expertise of specialized firms.
However, these benefits are only realized when the operation is conducted with transparency, proper documentation, and in compliance with the requirements of the Federal Revenue Service.
Issues related to taxation, tax classification, fraudulent claims, and the use of tax credits require ongoing technical monitoring.
That is why having access to specialized accounting advice makes all the difference in reducing risks and maximizing operational results.
Talk to CLM Controller
Does your company currently conduct or plan to conduct import operations on behalf of and at the request of others?
A CLM Controller has expertise in accounting for importers, tax compliance, tax planning, and foreign trade.
