Law 14,537/23, which reduces the income tax rate on remittances abroad, has come into force. The measure aims to reduce the cost of international operations carried out by Brazilian companies—it benefits companies in the tourism sector, such as agencies, tour operators and maritime cruises.
The law reduces the withholding income tax (IRRF) rate from 25% to 6% on remittances of up to R$ 20,000 per month for the coverage of personal expenses on trips for tourism, business, service, training or official missions.
The benefit will be in force in the period from January 1, 2023 to December 31, 2024. The rate will be raised to 7% in 2025, 8% in 2026 and 9% in 2027.
The reduction of the IRRF on remittances was adopted for the first time in 2006, in order to stimulate tourism. The tax is charged, for example, on the purchase of travel packages and airline tickets when there is no agreement between Brazil and the destination country.
The law arises from Provisional Measure 1138/22, approved by the Chamber of Deputies and by the Senate without modifications to the original text edited by the government.
The government estimates that the reduction of the IRRF on remittances will cause a loss of revenue of R$ 1.07 billion in 2023, R$ 1.52 billion in 2024 and R$ 1.68 billion in 2025.
Source: Agência Câmara de Notícias
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