Reduced Withholding Income Tax on travel expenses incurred by Brazilians abroad

On September 22, Provisional Presidential Decree No 1,138/2022 was published, reducing the Withholding Income Tax rate on amounts used to cover personal expenses incurred by Brazilians in international travels.

The measure is focused on developing the competitiveness of the national tourism sector, reducing the cost of international transactions brokered by the industry, which include tourism and business services, up to BRL 20,000 per month.

The rate will be reduced to 6% between January 1, 2023 and December 31, 2024. Thereafter, a progressive 1% increase per year will be in place until December 2027, as shown in the table below:

The decree will be in force for 60 days and its effects can be extended for an additional 60-day period, but the ruling will expire If the Brazilian National Congress has not signed it into law by then.