RECOF and RECOF-SPED: the industrial bonded warehouse under computerized control.
What it is, who qualifies and how the suspension of taxes works.

What the RECOF regime is

RECOF stands for the Special Customs Regime of Industrial Bonded Warehouse under Computerized Control. It is the regime that allows the beneficiary company to import or acquire on the domestic market, with suspension of the payment of taxes, goods to be submitted to operations of industrialization of products intended for export or for the domestic market, under computerized control. This is the official definition of the Federal Revenue, and it already reveals the logic of the regime: the company does not disburse the federal taxes on the entry of the input — they remain suspended — and they are only settled according to the destination the finished product turns out to have.

Within the structure of customs law, RECOF is a species of industrial bonded warehouse: the substantive basis is art. 93 of Decree-Law 37/1966, which authorizes the industrialization of goods under a bonded-warehouse regime. What RECOF adds to the classic formula is computerized control — the trade-off for the benefit is that the company keeps, in a dedicated system or in its digital tax bookkeeping, the continuous record of everything that enters, is transformed and leaves the regime.

The central gain: cash flow

RECOF is not an incentive that reduces the tax burden at the end — it is a regime that changes when the taxes are paid. An export industry that imports inputs in volume and on a recurring basis would normally advance II, IPI, PIS/Pasep and Cofins on each operation, tying up cash that would only return much later, with the export of the finished product. Under RECOF, that disbursement on entry does not occur: the goods are admitted with suspension, and the suspension is converted into extinction when the industrialized product is exported. That is where the cash-flow relief characteristic of the regime comes from.

The rule in force — and what was left behind

Here lies the most common mistake in texts about RECOF: citing revoked rules as if they were in force. The rule that governs the regime today is RFB IN 2.126, of 12/29/2022 (published in the Official Gazette of 12/30/2022, in force since 02/01/2023), amended by RFB IN 2.225/2024. It was this instruction that consolidated into a single instruction the two modalities of the regime — previously dealt with in separate acts — and that, in its art. 48, expressly revoked IN 1.291/2012 (RECOF System) and IN 1.612/2016 (RECOF-SPED). Practical consequence: any requirement, term or percentage of the regime must be read in 2.126/2022 — the former rules no longer apply.

How it works: the taxes that are suspended

The heart of RECOF is the suspension of federal taxes on the admission of the goods to the regime. The suspended taxes are the Import Tax (II), the Tax on Industrialized Products (IPI), the Contribution to PIS/Pasep and Cofins — and, where the goods come from abroad, also the Contribution to PIS/Pasep-Import and Cofins-Import. The suspension applies both to the import and to the acquisition on the domestic market of the inputs the company will industrialize.

Suspension is not exemption: the tax credit exists, but its enforceability remains suspended while the goods stay within the regime. What happens to that credit depends on the destination of the product: if the industrialized product is exported (or re-exported, or used in a service rendered to a client abroad), the suspension is converted into extinction of the corresponding taxes; if the product is intended for the domestic market (nationalization), the company carries out the clearance for consumption and pays the taxes that were suspended. It is this dual exit that gives RECOF the flexibility that distinguishes it from regimes purely geared to export.

RECOF IPI — clearing up a naming confusion

Searches for “RECOF IPI” are common, as if it were a stand-alone regime. It is not. The expression refers to the suspension of IPI within RECOF: IPI is merely one of the suspended federal taxes on admission (together with II, PIS/Pasep and Cofins), and not a sub-type of the regime. Under the current framework of IN 2.126/2022, IPI is suspended as part of the regime’s package of taxes and is extinguished on the export or re-export of the industrialized product — there is no separate “RECOF for IPI” distinct from a “RECOF for II”. The real distinction within the regime is another: between the System and SPED modalities, which we will see next.

RECOF System and RECOF-SPED: what the difference is

RECOF has two modalities, and the difference between them is just one: the means of computerized control required of the company. Everything else — the suspended taxes, the qualification requirements of art. 5 and the commitments of art. 13 — is identical in both. They are not distinct regimes: they are two control paths of the same regime, consolidated in RFB IN 2.126/2022 (art. 1).

• Under RECOF System, the company needs a dedicated computerized system for controlling the regime, integrated with its corporate systems and with permanent access by the Federal Revenue. It is the classic model — more robust, but with a higher cost of implementation and maintenance.
• Under RECOF-SPED, control is carried out through the Digital Tax Bookkeeping (EFD-ICMS/IPI) of the SPED, with the completion of Block K (control of production and inventory). It dispenses with the dedicated system: it leverages the digital ledgers the company already files, which reduces the cost and simplifies entry into the regime.

In practice, the choice between the two modalities is a decision about system maturity and operating volume: companies with a robust IT infrastructure and very-high-volume operations tend toward RECOF System; companies that want the benefit with a lower initial investment find in RECOF-SPED a more direct path, supported by the bookkeeping that already exists.

Who can qualify: the requirements of art. 5

The requirements to qualify for RECOF are in art. 5 of RFB IN 2.126/2022 — and here the most persistent myth about the regime must be dispelled. The rule in force does not require a minimum net worth (those old figures of BRL 10 million / BRL 25 million that still circulate) nor a minimum revenue. That net-worth floor belonged to IN 1.612/2016, now revoked, and was removed by RFB IN 1.904/2019 even before the 2022 consolidation. Repeating that figure is citing a rule that no longer applies.

What art. 5 does require are conditions of regularity and standing:

The specific obligation of the aeronautical sector

There is one company profile with an obligation of its own: those that render aircraft maintenance and repair services to clients abroad (art. 4, II). For these, the IN requires an annual minimum of USD 5,000,000.00 in services, rendered against payment in foreign currency. It is a sectoral requirement — it applies to that specific profile, not to industrializers in general.

It is worth adding who, in practice, benefits from the regime. RECOF was designed for the export industry with recurring and high-volume imports, with a structured production system and the capacity to track multiple input entries on a continuous basis — and whose export represents at least the order of 50% of the value of the goods admitted per year. The central gain, as we have seen, is cash flow, coupled with the flexibility to direct part of the production to the domestic market. Companies with occasional or low-volume flows, by contrast, tend to benefit more from drawback — a subject the last section explores in depth.

The commitments (art. 13) and the term of the regime (art. 14)

RECOF is not an unconditional benefit: in exchange for the suspension, the beneficiary assumes annual commitments, set in art. 13 of RFB IN 2.126/2022. They are two figures that structure the whole regime:

• Minimum export (art. 13, I): export industrialized products at an annual minimum value equivalent to 50% of the total value of the goods admitted to the regime in the same period.
• Minimum industrialization (art. 13, II): apply annually, in the production of the goods it industrializes, at least 70% of the goods admitted to the regime.

An important note for those entering the regime: in the first assessment period, only 50% of those obligations are required (art. 13, §2) — an entry step that recognizes the operation’s maturation curve. And beware of outdated figures: secondary sources still cite “80%” for these percentages — those were the indices prior to 2019. The figures in force are 50% and 70%, equalized between the two modalities.

The term: 1 year extendable by a further 1

Art. 14 sets the term of validity of the regime at 1 year, automatically extendable by a further 1 year — which may reach up to 5 years where goods with a long manufacturing cycle are involved. A detail that often escapes notice: the starting point of the term is not the date of qualification, but the release or clearance of the goods of the admission import declaration — or the entry of the first acquisition on the domestic market. It is therefore from the release of the goods that the clock of the regime is counted.

The mechanics of the operation: admission, destinations and proof

Once qualified, the company operates the regime in a continuous cycle that runs from the entry of the input to the annual proof of the targets. It is worth knowing the stages, because it is in them that the computerized control that gives the regime its name takes shape.

1. Admission. The imported goods enter the regime on the basis of an import declaration registered in Siscomex, on the terms defined by Coana; acquisition on the domestic market is also admissible. At that moment, the federal taxes are suspended.
2. Industrialization. The admitted goods are submitted to the operations of industrialization under suspension of the taxes, becoming integrated into the product the beneficiary manufactures (including parts and pieces).
3. Control. The entire flow is recorded in the dedicated computerized system (RECOF System) or in the EFD-ICMS/IPI with Block K (RECOF-SPED), with the assessment of entries, inventory, exits and credits.
4. Destination. The finished product receives one of the admitted destinations — and it is the destination that resolves the suspended credit.
5. Proof. At the end of the period, the company proves compliance with the export and industrialization commitments before the Federal Revenue.

The possible destinations (art. 28)

Art. 28 of RFB IN 2.126/2022 lists the destinations that the product (or the admitted goods themselves) may receive in order to leave the regime:

It is the clearance for consumption (nationalization) that allows the company to sell part of the production on the domestic market: it extinguishes the regime as to the goods involved through the payment of the taxes that were suspended — levied on the foreign goods in the state in which they were imported or already incorporated into the product industrialized under the regime. It is this possibility of directing part to the domestic market, without depending exclusively on export, that constitutes the distinctive flexibility of RECOF.

The ancillary obligations of RECOF-SPED

Under RECOF-SPED, control translates into precise documentary obligations: keeping the tax bookkeeping of the operations of the authorized establishments segregated; keeping the Production and Inventory Control Ledger as part of the EFD (Block K of the EFD-ICMS/IPI); keeping the digital bookkeeping up to date; and submitting to the Federal Revenue unit the proof report of compliance with the obligations by the 30th day of the month following the annual assessment period. It is the paperwork that sustains the benefit — and where an inconsistency turns into a risk of non-compliance.

How to qualify for RECOF — the step by step

Qualification for RECOF is an administrative process before the Federal Revenue, governed by Coana Ordinance 114/2022 (which deals with the qualification and enjoyment of the regime). Unlike drawback — which operates through a grant act for each operation —, RECOF is a continuous regime: once qualified by a declaratory act, the company operates the regime without needing authorization operation by operation. The official path is this:

1. Verify fitness and choose the modality. Confirm that the company meets the requirements of art. 5 (tax regularity, FGTS, Cadin, CNEP, absence of a special inspection regime in the last 3 years, RADAR qualification and DTE) and decide between RECOF System (dedicated system) and RECOF-SPED (EFD-ICMS/IPI with Block K).
2. Open the digital process on the e-CAC. On the Virtual Service Center (e-CAC/CAV), use “Request a service via digital process”, in the “Special Regimes” area, option “RECOF or RECOF-SPED — Qualification Request”.
3. Complete the request and attach the documents. Complete the Qualification Request (Annex I of Coana Ordinance 114/2022) and attach the articles of association or bylaws, identification of the signatories, a power of attorney where applicable and, if applicable, the aeronautical authorization.
4. Follow the Federal Revenue’s analysis. The competent unit analyzes the request; follow the progress through the digital process itself and respond to any requirements.
5. Obtain the qualification act and begin enjoyment. Once the request is granted, the company begins to admit goods into the regime with suspension of the taxes, counting the term of art. 14 from the release of the admission goods.
6. Operate the control and prove the targets. Maintain the computerized control (dedicated system or Block K), manage the destinations and submit the proof report of the commitments of 50% export and 70% industrialization at the end of the period.

RECOF or drawback? (and where Repetro comes in)

The question that comes up most is the comparison with drawback — and it makes sense, because both regimes suspend taxes on the import of inputs for products that will be exported. The difference is one of architecture and vocation. Drawback (the suspension modality) operates per operation: a grant act, approved on the Single Portal, sets the quantity, value and export term, and the focus is the export of the resulting product — diverting to the domestic market requires paying the taxes with surcharges. RECOF is a continuous regime: a single qualification by a declaratory act covers a permanent flow of operations, dispenses with the grant act for each import and allows part of the production to be directed to the domestic market (via clearance for consumption, with payment of the suspended taxes).

RECOF and Repetro: not to be confused

Another frequent question crosses RECOF with Repetro. They are distinct regimes and are not to be confused. RECOF/RECOF-SPED is a generic industrial bonded warehouse, applicable to the industrialization of products intended for export or for the domestic market in any fit sector. Repetro-Sped is a regime specific to the oil and gas sector (exploration, development and production of deposits), governed by its own rule. The point of contact is that the same RFB IN 2.225/2024 that amended RECOF also touched on related adjustments to Repetro — but that does not make them the same regime. For oil and gas, the path is Repetro; for the export industry in general, RECOF.

How the firm acts — from fitness to secure enjoyment

Fitness diagnosis

The TaxUp team’s starting point is the question that precedes any request: is RECOF the right regime for this operation? The diagnosis crosses the volume and recurrence of the imports, the export profile, the capacity to meet the 50% and 70% targets and the maturity of the control systems — and compares RECOF with drawback and with the other special customs regimes. From that map comes the recommendation of modality (System or SPED) and the design of the control structure.

Qualification and assembly of the process

The most technical front is qualification: verification of the requirements of art. 5, remediation of any pending issues of tax regularity, FGTS, Cadin and CNEP, and assembly of the digital process on the e-CAC with the request of Annex I of Coana Ordinance 114/2022 and the corporate documentation. It is here that documentary inconsistency is eliminated before it turns into a requirement or a denial.

Enjoyment, proof and litigation

In day-to-day work, the task is one of governance of the regime: structuring the computerized control (dedicated system or Block K), managing the destinations of art. 28, monitoring the annual commitments and preparing the proof report. When an issue arises — a missed target, a classification divergence, a demand for payment —, the firm conducts the technical defense, from the administrative challenge to the CARF, sustaining the consistency of what was declared and admitted under the regime.

Integration with the New Import Process

RECOF does not live in isolation: it articulates with the qualification on Radar/Siscomex, with the tax classification and, increasingly, with the migration of imports to the DUIMP on the Single Portal. In operations with related parties, the valuation of the inputs speaks to customs valuation and transfer pricing. The Customs Law pillar brings together the neighboring pieces of this machinery — from customs clearance to the bonded warehouse and the ex-tariff —, and connects the regime to the sectors that use it most.