While Brazil is in the process of simplifying its tax regime, which has led the country to review its VAT system, the state of Rio de Janeiro is planning to entice tourists by offering them a tax exemption.

Whether it’s the simplification of administrative formalities or visa exemption for a selection of nationalities, countries have long used such measures to attract tourists. Then there’s tax-free shopping, offering overseas visitors the possibility of being reimbursed the amount equivalent to VAT on purchases made during their trip. It’s a well-known – if not somewhat fastidious – scheme that concerns, for example, non-European travelers making purchases within the European Union.

EU citizens, meanwhile, can benefit from tax-free shopping in other global destinations. When they travel to Japan, for example, they can take advantage of tax-free shopping in authorized stores. This is usually done after the purchase, in a special area of the store. And it can be highly worthwhile, given that VAT in Japan is 20% (except for cultural goods and restaurants, which are taxed at 10%).

The state of Rio de Janeiro in Brazil has decided to follow suit, according to Tourmag.com, a specialist media outlet for travel agents. Rolling out from 2025, this tax exemption is intended to apply to purchases made by foreign travelers using a bank card that has not been issued from within the Brazilian banking system. In-store purchases, such as clothing or souvenirs, will be eligible. However, your feijoada and other local delicacies will not be tax-exempt, nor any other consumption in a hotel, restaurant or bar. Plus, only accredited stores and establishments will be able to refund the sales tax to tourists.

This good news for travelers comes a year after the approval of a tax reform program, which included a simplification of taxes for Brazilians as well as the creation of a value-added tax. The whole point of this tax exemption is, of course, to encourage foreign travelers to spend even more, in a context that is already positive for Rio, since the state’s visitor numbers rose by 27% in 2024 (to the end of November 2024), representing 1.3 million travelers. Visitors from Argentina, Chile, the United States and France were the most numerous.