Further clarification on exemption of study aboad from new Brazilian overseas payment tax
28 January 2016

Last week we reported the good news that study abroad programmes will be exempt from a new 25% tax on overseas payments imposed by the Brazilian government. A Department of Federal Revenue announcement (in Portuguese) this week has clarified how this new tax affects other course related fees.

Expenses related to the course (such as accommodation, airport transfers, books, and insurance) will also be exempt but only if these appear on the invoice from the school to the agency or to the individual student. It is therefore important to ensure that as many services as possible are listed on the course invoice. This situation may help institutions increase their sales of these additional related services, as they will appear to be less expensive - if purchased separately prospective students would have to pay the 25% oversees payment tax on them.

Where applicable, this tax will be levied on the overseas companies, but it will be collected at the point of sale via the method of transfer, such as a foreign exchange company or bank. The tax only applies to payments made within Brazil, and  not  to payments made in-country to hotels or other service providers.

English UK corporate member, BMI Media (who run student recruitment fairs, including Salão do Estudante in Brazil), has said that whilst the poor exchange rate remains a challenge, all major media in Brazil has covered this tax exemption for education. Therefore they believe that there will be a short term boost in the number of Brazilian students looking to study abroad and in those bringing forward plans that they may have had to travel later in the year.

Should you have any further questions regarding the tax, the Brazilian international education market or BMI's Brazil Agent workshop or Salão do Estudante please feel free to contact Samir Zaveri or Rupert Merrick.

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