Taxes on Tourism in Brazil
Brazil is a country known around the world for its tourism potential. With that in mind, the government implements taxes on tourism in order to generate more revenue. In this article, we will learn more about taxes on tourism in Brazil.
Brazil offers an amazing range of tourist attractions but does not seem to live up to its potential, as the number of people travelling in Brazil - born in Brazil or abroad - is lower than it should be. Despite the positive expectations concerning the future of this market, some might say that its full potential will continue to be hindered unless the Brazilian tax burdens are lowered significantly. Taxes on daily hotel rates in Brazil are around 50%, while in the United States they are around 10%.
What happens in fact is that there are taxes that are not directly related to tourism itself and these make Brazil a significantly less attractive and expensive country to travel to.
Taxes and fees on tourism
Putting this aside, let us take a look at the taxes and fees charged on tourism in Brazil.
Tourism in Brazil, especially for hotel services, are subject to ISS collection. ISS stands for Imposto Sobre Serviços, and is a tax collected on the provision of all kinds of services in Brazil. As it is a municipality tax, each municipality determines the ISS rate that will be collected in each municipality. Despite this, it is still the responsibility of the government to set minimum and maximum ISS rates, as well as other limitations.
Although ISS is also collected in a great number of situations in Brazil, it is especially related to hotel services, since it is added to the value of the daily rate. The consumption of minibar services, however, are a delicate matter. If it is already included in the hotel daily rate, then ISS will be collected on it. But in cases where it is not included, it is considered as a service of provision of food and beverage, where ICMS will apply.
Depending on the city, the ISS rate can range from 2% to 5%.
A “service fee” may be charged on waiter services in restaurants and hotels. Although it is present on the bill at check-out and may appear to be mandatory, customers are not obligated to pay this service fee. It is a tip given only in cases where the customer feels that the service was particularly good.
Even though the most common rate for the service fee is 10% of the total price - be it a restaurant bill or a hotel daily rate - there are some places where it can reach up to 15% or even 20%, especially in upmarket restaurants.
Several Brazilian cities collect a tourism fee. This fee was instituted by each municipality’s Tourism Department in order to raise funds for the improvement of the city, such as its structure, maintaining its tourist attractions and promoting it internationally and in Brazil. It is important to say that the payment of this fee is optional, but some hotels may try to add it to the final bill without customers noticing it. It is charged per night on every tourist staying at any lodging in the city.
Several Brazilian municipalities collect it such as Maceió, Natal and Rio de Janeiro. Its value ranges from BRL 1,50 to BRL 5,00 per night for each room - depending on the size of the hotel.
Environmental conservation fee
Some municipalities specially dedicated to ecotourism collect a different type of mandatory fee, the Taxa de preservação ambiental, which is Portuguese for Environmental conservation fee. This fee is mandatory and must be paid by any tourist or vehicle entering the city. It is collected in order to preserve the city’s main economic activity, the ecotourism.
Although this fee is only collected when a tourist or vehicle enters the municipality, it is much more expensive than the tourism fee. Tourists must pay it, even if they do not stay in a lodging. While cities like Bombinhas charge it on any tourist vehicle entering its territory, with values ranging from BRL 2,72 - for motorcycles - to BRL 109,16 - for buses. Islands like Ilhabela, Morro de São Paulo and Fernando de Noronha charge a daily fee for duration of the stay. On these islands the values range from BRL 15,00 to BRL 43,20.
Tourists are charged this fee upon their entrance to the island/city. In some cities, like Bombinhas, there is an electronic radar that registers every vehicle’s license plate entering the city and the vehicle’s owner has 30 days to pay the environmental conservation fee at the Town Hall.
A final tax, the Room tax, or Doação para Turismo, can be added to the hotel daily rates in Brazil. It is only collected in some cities and is an optional contribution collected by hotels that are members of Associations of Conventions & Visitors Bureau. It ranges from BRL 1,00 to BRL 9,00 and is collected per person, daily. This contribution is used for marketing and other promotional materials by the Conventions Bureau.