$ 1,000 limit on duty free stores starts in 2020 – Brazil

The Minister of Economy, Paulo Guedes, signed a decree that increases the limit of purchases in duty free stores to US $ 1,000 in the international arrival of ports and airports. The measure will apply from 2020 for all types of products, including electronics such as iPhone and iPad, perfumes, cosmetics and drinks.

Paulo Guedes and Jair Bolsonaro

The ordinance was published on Tuesday (15) in the Official Gazette. “The sale of goods exempt to passengers arriving from abroad … will be made up to the limit of US $ 1,000.00 (one thousand United States dollars) or the equivalent in another currency, per passenger”, says the text signed by Guedes . The current limit is $ 500.

The new duty-free rule will be effective as of January 1, 2020. The ordinance recalls that purchases over US $ 1,000 will fall under the special tax regime of the Federal Revenue: this means that the excess amount will be charged at 50% (tax import).

There are three different types of taxation for people who travel by air:

  • when making a purchase in international duty free shops, you are subject to the rules of your destination – some countries have already released amounts above US $ 1,000;
  • When you return to Brazil, you will find the duty-free shops in the Arrivals area; they are subject to national rules and will limit tax-free purchases to up to $ 1,000 in 2020 (the surplus will be charged);
  • Upon leaving the restricted landing area, you will pass the declaration of assets area to the Revenueand may bring up to $ 500 worth of goods, not counting what was acquired at the landing free shop – the excess amount will be taxed at 50%.

The ordinance does not change the quota of US $ 500 for products coming from abroad: that is, this will remain the valid limit for goods in the luggage of international flights. Exceeding this amount, the Revenue levies a 50% tax on the surplus. (As we said before, duty free purchases from landings do not fall within that limit.)

President Jair Bolsonaro promised last week that the limit for purchases in duty free would also be increased on land trips, as on the border with Paraguay, from US $ 300 to US $ 500. However, the ordinance signed by Guedes does not mention this .

Revenue stops collecting R $ 62 million in taxes in 2020

The Revenue estimates that, with the new limit for airport duty-free shops, R $ 62.64 million will no longer be collected in 2020. The collection loss in 2021 was estimated at R $ 72.10 million, with an additional R $ 83, 03 million in 2022 and R $ 95.53 million in 2023.

Products from duty free stores are exempt from import tax, but must pay the Fundaf fee (Special Fund for the Development and Improvement of Inspection Activities), which is managed by the Revenue Service.

The technical department of the Ministry of Economy criticized the increase in the limit of purchases in duty-free stores, saying that the quota of US $ 500 dollars is already one of the highest in the world. For example, Argentina, Chile, Paraguay and Mexico exempt duty free purchases up to a maximum of US $ 300.

With information: official diary, Reuters.

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