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PS4 Brazil Importation costs revealed. Taxes say Olá!! ($1161.53 USD in taxes!)

Microsoft get around this by having a much lower transfer price, inflicting losses on the parent and getting a higher tax bill because Brazil has harder to avoid corporation tax than the US.

Sony are basically playing by the rules as set by the government in Brazil, if people there want shit to change then vote for different politicians.
 

ethomaz

Banned
lol that picture.

5833_750771844949429_1400783035_n.jpg
 

Tsundere

Banned
Ok.

I think there are a big confusion with "Sony is manufacturing PS3 in Brazil / MS is manufacturing 360 in Brazil".

First... no component part is manufacture here... only the case, box and manuals are made here... everything else is imported (CPU, GPU, Motherboard, Memory, etc).

So the consoles are mounted here... not manufactured at all.
Source?
 
We don't know the internal transfer price that Microsoft are selling the Xbone to MS Brazil. That picture is wrong because it assumes a $499 price, it is probably closer to $250.

Why? Sony Brazil uses $390 and MS $250... right?

I too would be curious to know how they would be able to get away with that. Does that mean that MS is suggesting the product would be sold at a fraction in Brazil, compared to what it will sell at in other countries, as well? Seems like something they would get in trouble for if that isn't an accurate representation of what they will actually be selling the product for.
 

That is wrong because the taxes are calculated post margin, not pre-margin, one would need to put R$1029.6 into that calculator, not the transfer price. Taxes in Brazil are calculated on local sale price, which is the transfer price + local distributor margin, the latter is set to a minimum of 20% by law to ensure a high level of taxation regardless of any tricks with the transfer price.
 
Every item in Brazil has its own tax brackets

Random (made up examples)

Books - 0%
Beans - 5%
Beer - 50%
Video games - 80%

Etc etc

To avoid taxes, Nintendo used to manufacture the GC in Brazil, made by Gradiente.
 
Why? Sony Brazil uses $390 and MS $250... right?

To get a lower consumer price in Brazil I guess? My view is that Sony know that most serious gamers in Brazil will just import from somewhere else in LA so don't want to inflict losses on the parent to get a low retail price, and end up paying a higher level of corporation tax than necessary in Brazil.

I too would be curious to know how they would be able to get away with that. Does that mean that MS is suggesting the product would be sold at a fraction in Brazil, compared to what it will sell at in other countries, as well? Seems like something they would get in trouble for if that isn't an accurate representation of what they will actually be selling the product for.

Get away with what? The SEC may take issue with it, but this kind of stuff happens enough for MS not to bother worrying about it. Transfer pricing is a classic tax avoidance tool.
 

Frodo

Member
So, are we really accepting that PS4 is the ONLY Sony product that falls under all those taxes? Everything else, laptops, cameras, bluray players and et cetera Sony sells at a loss only to give Brazilians the opportunity to buy them?

Why isn't the Vita being sold at the same margin/taxes?
 

FINALBOSS

Banned
SO WHY DOESN'T VITA COST LIKE >US$900, SONY???

Because it's manufactured there.

And I'm not surprised by this news at all--it was retarded for people to think this price was Sony's doing anyways. Brazil has crazy fucking high taxes and import fees for shit like this. I think most Brazilians know how to get around it anyways so it's really not that big of an issue.
 

ethomaz

Banned
That is wrong because the taxes are calculated post margin, not pre-margin, one would need to put R$1029.6 into that calculator, not the transfer price. Taxes in Brazil are calculated on local sale price, which is the transfer price + local distributor margin, the latter is set to a minimum of 20% by law to ensure a high level of taxation regardless of any tricks with the transfer price.
You know what is even more sad? Vita was officially sold here at R$1400.

Using the same PS4 maths with Vita you will get something close to R$3000... not R$1400... more funny yet is that if you use the same math of Vita with PS4 you get something close to the Xbone price here (~R$2000).
 

Frodo

Member
Because it's manufactured there.

And I'm not surprised by this news at all--it was retarded for people to think this price was Sony's doing anyways. Brazil has crazy fucking high taxes and import fees for shit like this. I think most Brazilians know how to get around it anyways so it's really not that big of an issue.

Source?
 
We don't know the internal transfer price that Microsoft are selling the Xbone to MS Brazil. That picture is wrong because it assumes a $499 price, it is probably closer to $250.

Maybe, we don't know if they want to test their transfer prices with margins or prices. I would venture to guess that they would have to test margins because they wouldn't want to get into the weeds with keeping the data needed to test the prices of all of its SKUs across of all of its hardware products.
 
That is wrong because the taxes are calculated post margin, not pre-margin, one would need to put R$1029.6 into that calculator, not the transfer price. Taxes in Brazil are calculated on local sale price, which is the transfer price + local distributor margin, the latter is set to a minimum of 20% by law to ensure a high level of taxation regardless of any tricks with the transfer price.

Thank you for your answer!
 
So, are we really accepting that PS4 is the ONLY Sony product that falls under all those taxes? Everything else, laptops, cameras, bluray players and et cetera Sony sells at a loss only to give Brazilians the opportunity to buy them?

Why isn't the Vita being sold at the same margin/taxes?

It's probably because volumes are so restricted atm.

On other products Sony probably have the internal price set lower and then make it up with distributor margin then pay a higher level of local corporate tax by booking the profits locally. Or they manufacture stuff locally, I know they make Vaio laptops and Xperia phones in the country. The Xperia ZQ, for example, was a specially locally manufactured SKU of the ZL.

Sony won't sell at a loss though, basically with the PS4 it looks like Sony want the income/revenue to be booked in Japan rather than in Brazil, my guess is that they need to show a decent level of profitability to ensure there are no more tax asset writedowns on Japanese DTAs.
 

Road

Member
So, are we really accepting that PS4 is the ONLY Sony product that falls under all those taxes? Everything else, laptops, cameras, bluray players and et cetera Sony sells at a loss only to give Brazilians the opportunity to buy them?

Why isn't the Vita being sold at the same margin/taxes?

Actually, laptops, cameras and bluray players all have their specific taxes, yes, which may or may not be different from video games (I don't know off the top of my head.)

However, all video games have the same taxes, Vita, PS4 and XBONE.

What Sony's accounting for the PS4 means is that Microsoft and Sony themselves are losing a thousand dollars or more on XBO and PSV.
 

Angelcurio

Member
And here i was complaining about our 36% of taxes for imported goods, which puts the total console cost around us$544 in total.
 
Get away with what? The SEC may take issue with it, but this kind of stuff happens enough for MS not to bother worrying about it. Transfer pricing is a classic tax avoidance tool.

I would think underreporting the value of your product when shipping it across borders with the intention of valuing it much higher once it is across that borders would raise a few red flags with the Brazilian government. It's money out of Brazil's pockets if they ignore it. It may well be a common form of tax avoidance, but I would think someone would want to crack down on that in Brazil. But I don't know what the enforcement regime is like in Brazil of course, but I would assume that if it was as simple as writing a dishonest number on a piece of paper, both MS and Sony would do the same. (Unless you're suggesting that MS actually intends to sell the Xbox in Brazil at half the price of what it sells for in the US. That would be one hell of a subsidy.)
 
Actually, laptops, cameras and bluray players all have their specific taxes, yes, which may or may not be different from video games (I don't know off the top of my head.)

However, all video games have the same taxes, Vita, PS4 and XBONE.

What Sony's accounting means is that Microsoft and Sony themselves are losing a thousand dollars or more on XBO and PSV.

I don't believe either company is losing money, someone above said that the Vita is assembled in Brazil so that will account for the lower price as there won't be importation taxes applied if that's the case.

As for the Xbox, MS will set a low internal price of around $250, then apply a 100% margin locally at MS Brazil, so the final taxable price is $500. So MS still receive $500 from retailers once all the taxes are deducted, but the $250 gross profit would be booked in Brazil rather than with the parent in the US. It may be that MS are willing to take a margin hit in Brazil as a strategic move though based on low volumes and good press, as well as low PS4 volumes. The amount of money loss in absolute terms would be very low even sold it for $400 (after deducting all associated taxes) because the volumes will be so small.

This is about the only PR win that MS have had with it, so I wouldn't be surprised if they are actually making a loss on their Brazilian price.

I would think underreporting the value of your product when shipping it across borders with the intention of valuing it much higher once it is across that borders would raise a few red flags with the Brazilian government. It's money out of Brazil's pockets if they ignore it. It may well be a common form of tax avoidance, but I would think someone would want to crack down on that in Brazil. But I don't know what the enforcement regime is like in Brazil of course, but I would assume that if it was as simple as writing a dishonest number on a piece of paper, both MS and Sony would do the same. (Unless you're suggesting that MS actually intends to sell the Xbox in Brazil at half the price of what it sells for in the US. That would be one hell of a subsidy.)

Well MS would actually be booking profits in Brazil which is probably important for the government, more than levying a higher level of importation duties I would think as it would show their model is forcing multinationals to locate their Brazilian operations locally which boosts employment etc...

Like I said above, I wouldn't be surprised if MS are losing money at that retail price in Brazil because the volumes are probably very low so the absolute amount of money lost will not be very high.
 

Frodo

Member
Actually, laptops, cameras and bluray players all have their specific taxes, yes, which may or may not be different from video games (I don't know off the top of my head.)

However, all video games have the same taxes, Vita, PS4 and XBONE.

What Sony's accounting for the PS4 means is that Microsoft and Sony themselves are losing a thousand dollars or more on XBO and PSV.

Yes, I'm aware that every product has a different taxation... The thing is, I've never seen a product go from US$399 to >US$1800 because of taxes alone. This has never happened. Not with Apple products, not with any console or any imported good before.

This is why it is so hard to believe this ludicrous price is result of taxes alone. It can't be.

If it is, all, I mean ALL, other companies are avoiding taxes somehow, and Sony is the only one paying what should be paid.

Just as an example, perfumes have a exorbitant 80% taxes (IIRC) and a US$30 bottle of your favourite CK fragrance doesn't arrive in Brazil costing R$300. (Not that there aren't fragrances that costing more than that, there are. But they usually are more expensive than US$30). Just saying.
 
Yes, I'm aware that every product has a different taxation... The thing is, I've never seen a product go from US$399 to >US$1800 because of taxes alone. This has never happened. Not with Apple products, not with any console or any imported good before.

This is why it is so hard to believe this ludicrous price is result of taxes alone. It can't be.

If it is, all, I mean ALL, other companies are avoiding taxes somehow, and Sony is the only one paying what should be paid.

Just as an example, perfumes have a exorbitant 80% taxes (IIRC) and a US$30 bottle of your favourite CK fragrance doesn't arrive in Brazil costing R$300. (Not that there aren't fragrances that costing more than that, there are. But they usually are more expensive than US$30). Just saying.

Remember, Sony isn't the one paying these taxes, consumers do.
 

ethomaz

Banned
Somebody used the official government calculator to get the taxes in PS.BlogBR... you can try yourself... you need just to add the ICMS.

http://www4.receita.fazenda.gov.br/simulador/BuscaNCM.jsp

Simulação do Tratamento Tributário e Administrativo das Importações

Código NCM 9504.50.00

Descrição NCM CONSOLES / MÁQS.JOGOS VÍDEOS

Taxa de Câmbio do Dia 21/10/2013 R$ 2,1611

Valor Aduaneiro Convertido: R$862,28 (USD 399)
Alíquota II (%) Tributo II R$ 172,46
Alíquota IPI (%) Tributo IPI R$ 517,37
Alíquota PIS (%) Tributo PIS R$ 14,23
Alíquota COFINS (%) Tributo COFINS R$ 65,53

As alíquotas podem ser preenchidas manualmente e os tributos recalculados

Fonte: RECEITA FEDERAL DO BRASIL (SITE DE APOIO AO IMPORTADOR)

TOTAL: R$ 1631, 87 (HUM MIL, SEISCENTOS E TRINTA E UM REAIS E OITENTA E SETA CENTAVOS).

IMPOSTOS? QUEREM ENGANAR A QUEM?
http://blog.br.playstation.com/2013...s-ouvimos-voces/comment-page-5/#comment-32565
 
DgbX7ih.png


"Suddenly, everyone is a tax consultant.
Economists and Lawyers, trow away your curriculum."

Haha, that's very good. This is exactly what I've been trying to say. As someone who has a law degree (In the US), the one thing I'm certain of is that we really don't know what we're talking about. (At least not in any kind of holistic sense.)
 

Subaru

Member
The saddest part is that we pay SO MUCH TAX in everything.

God, my salary is about R$ 6366,00 and I receive only R$4.952,53.
I pay R$ 1292 in taxes every month.

So, Playstation 4 is not the only problem =/
 

Gauis

Banned
Now I am curious about how much Sony discounted for the Vita and PS3...

Before the PS3 was manufactured in Brazil: R$ 1.400,00 (To get this price with the same amount of % taxes they should discount almost R$ 1.000,00)
After (Today): R$ 1.100,00 (Sony still losing monies?)

Vita (not manufactured in Brazil) : R$ 1.300,00 Where did the taxes go?


Bottom line, by their math, they where giving PS3s and Vitas for free before any were manufactured here.

And let's not even talk about the Xbone again...
 

ledman

Member
The saddest part is that we pay SO MUCH TAX in everything.

God, my salary is about R$ 6366,00 and I receive only R$4.952,53.
I pay R$ 1292 in taxes every month.

So, Playstation 4 is not the only problem =/

And most of these taxes end up being hijacked by politicians for their own benefit. The system health, security, infrastructure, education in this country are ridiculous. But we spend billions to stadiums and salaries for politicians.
 

joeblow

Member
Wow, the Recettear development team should make a sequel to that title and set it in Brazil. It would be the hardest game ever made.

"Capitalism, NO!"
 

Gbraga

Member
Not sure what's going on here lol. (I don't speak/read Portuguese)

Basically, not only their tax info is not accurate, but if instead of adding their profit to discount it later they just never added it to the product in the first place before calculating taxes, it would be ~$500 cheaper.

EDIT: It's still ~$350 cheaper only by using the correct tax info, btw.

That is, assuming his/her data is correct, and this I can't confirm or deny
 

Gauis

Banned
Not sure what's going on here lol. (I don't speak/read Portuguese)

In the first image he is simulating the retail price of the PS4 using the information Sony provided, but actually applying the taxes in the right place, gives about U$ 300 minus.

Second, best case scenario for imported goods, applying profit margins at the end to diminish the taxes waterfall effect, minus U$500 from the price given by sony.

Third, best case scenario with the Xbox, Xbox is selling at some loss.
 

Platy

Member
Not sure what's going on here lol. (I don't speak/read Portuguese)

Basicaly a dude who is not a lawyer or tax expert suddenly says "In this simulation, I take out this number out" and suddenly the game is cheaper =P

Both KotakuBr and ArenaIG said they consulted experts and except for a few bigger margins (lets say it was the pssimistic tax they made) it is everything pretty plausible.

The problem now is NOT why the PS4 costs 4k ... is why the XB1 don't
 
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