Chamber of Deputies included taxation on tickets for travel abroad in the tax reform; companies are silent
The main airlines in Brazil –, and – and the (Brazilian Association of Airlines) have not yet commented on the taxation of international flights included in the tax reform by . Congress decided to tax the purchase of round-trip flights abroad at a rate equal to half the VAT (Value Added Tax). For a one-way or return flight, the rate is full VAT.
Previously, these purchases were not taxed. The effect expected by the sector is that the measure, in addition to increasing the cost of tickets, will also make the Brazilian market less attractive for the entry of new companies. The logic is that a new player will no longer choose Brazil because of the tariff barrier and other markets such as Colombia and Chile will become more competitive.
O Poder360 sought out the country’s 3 largest airlines to comment on Congress’ decision, but the companies decided not to comment. To the digital newspaper, an executive said that his company has not yet had access to the documents that explain the taxation scenario. Abear, which represents companies in the sector, also decided not to comment.
TAX
As the value of VAT has not yet been calibrated by Congress, the rate that will fall on international tickets has not yet been defined. If the tax remains at the standard desired by the Chamber (26.5%), the tax on passengers who buy 2 tickets on the same airline will be 13.25%.
Domestic tickets will also have a higher tax incidence. Before the reform was approved, tickets for travel within the country were taxed at 9%. Now, they will be charged the full VAT rate.
The decision could result in a brake on the recovery of the airline market in the country. The year 2024 is considered good by companies and Brazil has returned to pre-pandemic numbers of international travel in several months of the year.
According to data from the (National Civil Aviation Agency), the country reached the 2nd highest figure in history in the movement of international passengers in January this year, with 2.3 million travelers. The result is only behind that recorded in January 2019 (2.4 million).
