Rio will propose tax free adoption for foreign tourists

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Rio de Janeiro will present at the November meeting of the National Council for Finance Policy (Confaz) a proposal for adopting tax-free (Tax exempt) foreign tourist purchases. 

This topic was discussed at the ACRJ (Commercial Association of Rio de Janeiro) this afternoon (20). Savio Neves (state secretary for Tourism) explained that foreign tourists would be exempted from the Tax on the Circulation Of Goods and services (ICMS) if they purchase specific products. This would result in a tax exemption of R$ 19,000,000. As a result, the Tourism Department anticipates a rise in sales of R$ 100 million.

“O tax-free works already all over the globe in some cities, and we would put Brazil and Rio de Janeiro ,especially in an incentive to the commerce of articles that tourists always buy more,” says Savio Neves, who believes that other states that welcome foreign tourists will follow the same path.

There is a tax exemption for foreign tourists in 60 countries. This includes neighboring countries like Uruguay and Chile, and Peru, which recently joined the policy. The proposal’s proponents argue that tourists are more attracted to destinations that offer tax exemptions.

Neves believes that it will be possible to be implemented in the first half of next year once the Confaz/Alerj project has been approved. The bidding process for a private company that will operate tax-free, which will integrate merchants with the state tax authorities to allow traceability of purchases, is another necessary step.

Global Blue, an operator of tax-free in over 40 countries, attended the event. They discussed legal issues such as which products are eligible, which tourists will benefit from the exemption, and whether there will ever be a minimum purchase value. There are many exemption options available. For example, you can buy the product at no tax at the shop or get the tax amount back at the airport before your return to your home country.

Luiz Velloso, advisor to the Federation of Trade in Goods, Services and Tourism in State (Fecomercio RJ), stated that the federation would be available to assist traders interested in implementing this system if approved. In addition, the National Service for Commercial Training will be mobilized to assist in this. He stated that Rio de Janeiro should be the gateway to the tax-free in Brazil.

Velloso points out that although the state has reestablished the flow of Brazilian tourists this year, it has not been able to resume foreign travel in the number it received before the pandemic. “Fecomercio is aware that it is a mechanism to help retailers. It is good news that we are emerging from a period of severe crisis.

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