Tatiana Cesso
In an effort to boost tourism and commerce, Rio de Janeiro has introduced a new initiative offering tax exemptions to foreign visitors. The “Tax Free” program, approved in December by the Legislative Assembly of Rio de Janeiro (Alerj), allows international tourists to receive a refund on the Imposto sobre Circulação de Mercadorias e Serviços (ICMS), a state sales tax, for purchases made in stores across the city.
The news was announced during an event organized by the Rio de Janeiro State Secretariat for Tourism (Setur-RJ) and TurisRio in Miami, which gathered travel agents, operators, and industry entrepreneurs in Florida with the aim of attracting more American tourists to Rio de Janeiro. I had the opportunity to attend the event, presenting the destination and the Brazilian delegation to the attendees.
The tax exemption will apply only to goods purchased in Rio de Janeiro and taken out of the country. This includes items such as souvenirs, gifts, and memorabilia, but excludes goods subject to tax substitution systems, such as those bought at supermarkets and pharmacies, as well as services like meals and drinks at bars, restaurants, and hotels.
Once the bill is signed into law, the state government will have 15 days to establish the regulatory framework, including setting minimum transaction values and accreditation requirements for participating businesses. Notably, businesses operating under the Simples Nacional regime and individual micro-entrepreneurs (MEIs) will not be eligible for accreditation.
The estimated fiscal impact of the measure is significant, with a projected R$85 million in tax exemptions over the next three years. The state’s treasury is expected to lose R$11.5 million in 2025, R$24 million in 2026, and R$49.7 million in 2027. Despite this loss, authorities believe the long-term economic benefits will outweigh the fiscal impact, as the program is expected to encourage more spending by international visitors.
Governor Cláudio Castro (PL) emphasized the strategic importance of the initiative: “The goal is to align with successful international practices already implemented in countries like Uruguay, Argentina, and Chile, to stimulate consumption by foreign tourists, strengthen local tourism, and make Rio a renowned shopping destination, in addition to its cultural and leisure activities.”
Gustavo Tutuca, Rio de Janeiro State’s Secretary, echoed this sentiment during the event in Miami, emphasizing the initiative’s potential to increase foreign tourist spending. “The approval of Tax Free in Rio state is a key milestone for strengthening commerce and tourism in the region. The measure places Rio on a new level of international competitiveness,” he said.
For tourists to benefit from the program, they will need to use a credit card issued abroad for their purchases and request the refund at the time of purchase. The refund will only cover the ICMS tax indicated on the receipt. To claim the refund, tourists must present their purchase receipts and passport (or identity card for residents of Mercosur countries) in designated areas at Rio’s airports and ports, where customs authorities will verify the purchases.
The announcement comes at a time when Rio de Janeiro has seen an uptick in international visitors. According to the Ministry of Tourism, the number of foreign tourists between January and September of this year increased by 12% compared to the same period in 2023.
The new tax exemption is expected to further strengthen Rio’s appeal as a global shopping and tourism destination, contributing to the city’s long-term economic and cultural growth.
