The beauty, hygiene and cosmetics industry occupies a prominent position in the world economy and Brazil is the 4t2h largest consumer in this segment, only behind the United States, China and Japan.
Although some question that the industry works with superficial, luxury products, data show that beauty and hygiene care are included in the daily routine of 99% of Brazilian households, however simple they may be.
Actually, the importance and strength of the sector in the national economy is reflected by its expressive figures: it invests the most in advertising; it is second in terms of product launches and investment in research and development; and, in 2018, it represented 2.3% of national GDP.
The quality of the national industry is shown in the scale of export of national products. In fact, in 2016, Brazil exported to more than 150 countries, with revenue exceeding R$ 200 million (75% of total revenue in the sector).
From a social perspective, the beauty, hygiene and cosmetics industry is also essential for the country, as it generates around 5.8 million income and employment opportunities, facilitating the process of social inclusion.
Precisely because of the importance of the sector, ANVISA (National Sanitary Surveillance Agency) realized the industry’s hopes and removed some of the bureaucracy from regulations governing the manufacture of cosmetics, thus increasing the speed of launches of new products and, consequently, the growth of the sector.
On the other hand, despite the importance of the sector for the economic and social development of the country, from 2015 beauty, hygiene and cosmetic products, already subject to a very high tax burden, suffered a significant increase in ICMS (State Goods and Services Tax) in 22 states and the Federal District, as well as IPI (taxation of output from distributors), which significantly affected its growth.
In fact, due to the above-mentioned increase in the tax burden, 2015 was the first time in 23 years that the sector shrank and did not emerge as leader in important categories for the maintenance of health and well-being.
Therefore, in order for the industry to continue to develop, it is essential for specialized professionals to work and monitor the sector, to deal with the various difficulties regarding the necessary know-how.
Zancaner, Salla and Faustino Law Firm has a team with extensive experience in the beauty, hygiene and cosmetics sector. In the tax area, its professionals, who have been working for more than 30 years in this specific sector of the economy, are available to assist in possible (but frequent) tax problems, including setting up preventive measures.