What is NCM and what is its importance for the Foreign Trade?

All the merchandise that circulates in the brazilian market, wether through import, export and/or commercial movement, has this essential code for the regularization of commercial relations.


What is NCM?


The Mercosur Common Nomenclature (NCM) is the 8-digit code that defines any and all goods that circulate in Mercosur countries.


Through it, the products are determined and classified, having their characteristics and particularities presented, in addition to being present in all invoices.

It is important to note that the NCM is based on the Harmonized Commodity and Coding System (HS) and its HS Code.

Each one of the numerals represents the following:

• the first two characterize the product (chapter);


• the next two dive deeper into its characteristics (position);

• the fith and sixth define the subcategory (subheading);

• the seventh brings the classification (item);

• the eighth specially determines what the merchandise is about (sub-item);

Harmonized System (HS)

The Harmonized System (HS) established by the World Customs Organization (OMA) is the system that guides - on global scale - the classification of products in countries, defining, standardizing and simplifying the customs classification of goods.

Its main goal is to prevent new products and services from being generically classified as “others” and not having the correct identification of their elements and basic function.

The HS is updated every 5 years and the last updtate was made in 2017. This year, 2022, we'll have a new one.

It has approximately five thousand groups of goods, and its code consists of 6 digits, the first six present in the NCM.

NCM x HS Code

In other words, the Common Mercosur Nomenclature (NCM) is derived from the HS Code, with the main difference being that it is more specific in the classification of products through its two extra digits.

However, as stated earlier, the HS Code originates from the HS while the NCM originates from Mercosur.

Importance for Foreign Trade

The goods and their NCM correct classification is essential to determine the taxes involved in import and export operations, in addition to providing agility in customs clearance and avoiding dubious and generic classifications that generate fines, delays and excessive costs.

Furthermore, the NCM defines wether the import and export process will be classified under a special customs regime, and wether there will be any tax reduction during the nationalization process.

With WM, our customers have guidance for the correct classification of the imported product in their NCM. We have 18 years of know-how in import and export processes. We guarantee expertise, security and the best targeting within possible tax exemptions and reductions for your operation.

Planning to import or export? Trust us.

WM Trading, innovation and excellence in international trade

Summary
Common Mercosur Nomenclature (NCM) is the 8-digit code that defines any and all merchandise that circulates in Mercosur countries, wether trhough imports and exports, to any commercial relationship that has an invoice. It is derived from the HS Code, a code from Harmonized System (HS) that guides - on a global scale - the classification of products in countries. The main difference between the two is the fact that the NCM is even more specific, since it has 2 more digits. The correct classification of the NCM avoids customs embarrassment, incidence of fines, delays and excessive costs.