Back-to-back in Merchant of Record Operations for Brazilian Vendors

Instructions on Tax Obligations for Sellers Based in Brazil in Merchant of Record Operations

Definitions

Seller(s): refers to the company registered on the Cartpanda platform that conducts operations under the Merchant of Record (MoR) model. Such companies are headquartered in the Federative Republic of Brazil and, therefore, for the purposes of this article, the term “Seller” may also be referred to as “Brazilian Company.”

What is a “back-to-back” operation?

The operation known as ‘back-to-back’ occurs when a Seller established in Brazil acquires goods from a foreign supplier and resells them directly to a buyer located abroad without the goods physically entering Brazilian territory. In this model, the Brazilian Company undertakes the commercial and financial intermediation of the operation, maintaining the goods in stock or transit abroad, allowing the goods to be sent directly from the supplier to the international buyer.

This triangular arrangement is characterized by the fact that the company domiciled in Brazil is contractually involved in both the purchase and sale of the goods. Still, the goods never physically transit national territory. For example, a Brazilian trading company may purchase products from a manufacturer in the United States for sale to a customer also in the United States, with the goods being shipped directly by the manufacturer to the customer. All negotiation, invoicing, and receipt of amounts are intermediated by the Brazilian Company, without any import or export from a Brazilian customs perspective.

What is the Brazilian Federal Revenue Service’s view of this operation?

The Brazilian Federal Revenue Service recognizes that, since there is no physical entry or exit of the goods into the country, the back-to-back operation is classified as an international sale of goods rather than an import or export operation under the applicable legal terms. Therefore, Import Tax (II), IPI-Import, PIS/Cofins-Import, or ICMS-Import are not levied. However, the revenue earned by the Brazilian Company from the resale abroad is subject to the PIS and Cofins regular assessment regime (according to DISIT Consultation Solutions No. 49/2007 and COSIT No. 306/2017).

What does the Central Bank of Brazil say about back-to-back?

The Central Bank of Brazil, for its part, defines a back-to-back transaction as the purchase and sale of goods without their actual entry into or exit from national territory, requiring, for its formalization, the registration of the exchange contract or, alternatively, the use of an international credit card, which does not require such registration.

In this regard, given the tax and exchange complexity of this type of structure, Cartpanda strongly recommends that the Sellers hire specialized professionals to ensure the correct calculation of taxes, proper bookkeeping, and compliance with ancillary obligations in Brazil.

Is Cartpanda responsible for calculating and collecting the Seller’s taxes in Brazil?

No! Within Brazilian territory, the issuance of invoices (notas fiscais), tax calculation, and payment of taxes arising from the Seller’s commercial activity are exclusively the Seller’s responsibility (including, as applicable, ICMS/ISS, PIS/COFINS, and other local ancillary obligations).

As a Merchant of Record (MoR), Cartpanda may calculate, charge, and/or remit taxes applicable to Transactions or to its own revenues (e.g., fees/commissions), as well as taxes required in other jurisdictions (e.g., sales tax/VAT), where mandated by law. In such cases, the Seller must provide the necessary information and documentation to enable accurate calculation and remittance, without transferring to Cartpanda the Seller’s tax obligations in Brazil.

Updated on: 10/22/2025