Understand the key dofferences between NCM (HS Code in Brazil) and CNAE (Brazilian Business Code).
If your markets and clients are from Brazil, you may be seeing a lot NCM codes and CNAE codes. In the text below, let's explain both codes and make a comparison for you to understand them easily.
NCM (Mercosur Common Nomenclature) – HS Code in Brazil
What it is: The Brazilian/Mercosur version of the HS Code (Harmonized System) used worldwide to classify goods.
Purpose:
- Classifies goods in imports and exports.
- Defines customs duties and taxes (Import Duty, IPI, PIS/COFINS, ICMS, etc.).
- Determines administrative requirements (licenses, sanitary/health, environmental controls).
Structure: 8 digits.
Example: 0901.11.10 → Coffee, not roasted, not decaffeinated, in grain.
CNAE (National Classification of Economic Activities – Brazil)
What it is: Brazilian classification system for economic activities carried out by companies and professionals.
Purpose:
- Identifies the company’s main and secondary activities in its CNPJ (Brazilian business registry).
- Determines tax regime eligibility (e.g., Simples Nacional, Presumed Profit, Real Profit).
- Used for government statistics and regulations.
Structure: 7 digits in the format XX.XX-X/XX.
Example: 0111-3/01 → Rice cultivation.
Key Idea
NCM = Product classification (what you trade).
CNAE = Business activity classification (what your company does).
Comparison Table
| Feature | NCM (HS Code in Brazil) | CNAE (Brazilian Business Code) |
|---|---|---|
| Meaning | Mercosur Common Nomenclature (HS Code) | National Classification of Economic Activities |
| Focus | Product / goods | Business activity |
| Use | Customs, taxation, trade statistics, licensing | Tax regime, CNPJ registration, statistics, regulation |
| Scope | Internationally standardized (HS system) | National, specific to Brazil |
| Digits | 8 digits | 7 digits (XX.XX-X/XX) |
| Example | 0901.11.10 → Coffee beans, not roasted | 0111-3/01 → Rice cultivation |