Tax-related aspects of logistics network planning: a case study in the Brazilian petrochemical industry



Linha de Pesquisa
Administração e Economia de Negócios

Luiz Felipe Frias, Isabel A. Farias, Peter Wanke, Henrique L. Corrêa, Luan Santos



International Journal of Logistics Research and Applications, v. 17, n. 2, pp. 114-135. Abstract: This study investigates the logistics network planning in a major Brazilian petrochemical company, taking into consideration the impact of tax-related costs, in addition to transportation and inventory costs. A Mixed Integer Nonlinear Programming model that considers the most relevant costs involved in the network planning process in Brazil was developed and subsequently applied to a case study of a large Brazilian petrochemical company. Our results support anecdotal reports regarding Brazilian companies intensely using ‘product tourism’ to take advantage of different interstate tax rates. Product tourism occurs when a logistically unnecessary flow of goods is established to a lower tax jurisdiction (with a corresponding increase in transportation costs) so that the company obtains a reduction in the amount of the taxes due.

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