On 28 February 2023, the government of Brazil has published Law no. 14,537, which reduces the withholding tax rates for cross-border payments related to travel to foreign individuals or entities residing or having their registered offices abroad.
The following reduced rate applies to payments related to tourism, business, official or educational trips abroad, as well as official trips.
- 6% from 1 January 2023 to 31 December 2024;
- 7% from 1 January to 31 December 2025;
- 8% from 1 January to 31 December 2026; and
- 9% from 1 January to 31 December 2027.
Regarding remittances related to tourism spending to countries where Brazil has signed a double tax treaty, the Brazilian tax authorities have issued rulings in private letters stating that the tax treatment of such remittances related to tourism should follow the text of the treaty, regardless of the existence of applicable national legislation. These remittances would fall under the corporate profits article of the applicable double tax treaty and would benefit from a 0% withholding tax rate.
