The benefit was sanctioned by Governor Cláudio Castro to stimulate trade and tourism. Another measure adopted to stimulate the economy are tax exemptions in Export Processing Zones.
Rio de Janeiro is the first Brazilian state to implement Tax Free, a law that allows foreign tourists to be refunded taxes (ICMS) in the form of cashback. In addition to instituting Tax Free, three other laws were signed by Governor Cláudio Castro renewing tax benefits, confirming the exemption for establishments located in Export Processing Zones (EPZs) – areas of free trade with foreign countries, intended for the installation of companies focused on the production of goods to be marketed outside Brazil.
– One of the aims of the project is to encourage tourism and trade at the same time, as well as contributing to the diversification of the state’s economic matrix, boosting the creative and cultural economy. These laws will guarantee the granting of benefits with legal certainty, safeguarding the rights and duties of the state and the companies – says Governor Cláudio Castro.
The tax refund through Tax Free will apply to purchases made in person, with a credit card issued abroad and in stores previously accredited to provide the benefit. The refund does not cover the provision of services and goods included in this category, such as meals and drinks offered in bars, restaurants and hotels. Tax Free is already adopted in Brazil’s neighboring countries, such as Argentina and Uruguay.
– The implementation of Tax Free has been a banner issue for the state of Rio since the beginning of discussions with the Treasury departments of other states. It’s a policy adopted by several tourist destinations around the world to stimulate consumption by travelers – says State Secretary of Finance Leonardo Lobo.
A study by the Fecomércio Institute for Research and Analysis in Rio de Janeiro (IFEC RJ) points out that Tax Free has the potential to double the amount spent by tourists in the state, from US$ 212 million to US$ 411 million annually – which would represent an impact of more than R$ 2 billion on Rio’s economy.
– This is a historic moment for Rio de Janeiro, reinforcing the pioneering spirit that characterizes our state. The sanctioning of the Tax Free Zone takes Rio to a new level of tourist attraction and positions us at the forefront of the national scene by introducing globally successful practices – says the Secretary of State for Tourism, Gustavo Tutuca.
EPZ will boost port activities
The ICMS exemption for establishments located in EPZs includes, among other projects, the Port of Açu, in the north of Rio de Janeiro, the largest private deep-water port and industrial complex in Latin America. The initiative seeks to guarantee exemption from ICMS on internal exits, i.e. imports and purchases from suppliers within the state of Rio by establishments located in EPZs.
The measure will encourage port activities, while also covering logistics areas, in line with the state’s Strategic Development Plan. In addition, the proposal follows the parameters of the legislation dealing with the Fiscal Recovery Regime.
Two other laws were also sanctioned: the one that adjusts the tax incentive for the paper and cardboard packaging sector and the one that extends until December 31, 2032 the tax benefit for the capital goods and school supplies production sectors, such as notebooks, drawing, tracing or calculating instruments, ballpoint pens, pencils and mechanical pencils.
Record number of international tourists
As of November this year, Rio de Janeiro has already received 1,352,012 international tourists, an increase of 27% compared to 2023. The number is expected to surpass the 1.5 million mark by the end of December, reaching the same level as 2014, the year of the World Cup, the best in history, with 1,597,153 foreigners. Check out the main source countries below:
1. Argentina – 400,684
2. Chile – 249,272
3. USA – 161.102
4. France – 64,957
5. Uruguay – 50,809
6. United Kingdom – 40,731
7. Portugal – 36,132
8. Germany – 34,185
9. Colombia – 32,164
10. Italy – 25,576
Credits: Rio de Janeiro State Department of Finance
