What was foreseen earlier?
According to Law No. 8438, dated December 28, 1998, “For income tax”, accommodation structures with four and five stars, which had the special status “Four and five-star Hotel/Resort, special status”, benefited from an exemption from corporate income tax. This exemption applied to entities that met the following conditions:
- Hotels and resorts with four and five stars have been categorized as “accommodation structures” with “special status” according to tourism legislation.
- We are holders of a registered and internationally recognized trademark (“brand name”).
- The exemption from corporate income tax was applied for a 10-year period for those structures that obtained special status by December 2024.
- The effects of exclusion commenced from the moment the accommodation structure began its economic activity, but no later than 3 years from receiving special status.
What has changed?
With the new changes, the exemption from corporate income tax for “Four and five-star hotel/resort, special status” accommodation facilities continues to apply, but with some important changes:
- The deadline to gain special status has been extended to December 2026 (from December 2024).
- The exclusion period remains 10 years, but the deadline for initiating the exclusion changes.
- The effects of exclusion begin at the moment the economic activity of the structure commences, but no later than 5 years from obtaining special status (previously it was 3 years).
What does this mean for businesses in the tourism sector?
This change brings several benefits to investors in the tourism industry:
- More time to benefit from the exemption Businesses applying for special status by the end of 2026 can benefit from a 10-year exemption, providing significant tax relief.
- Greater flexibility in starting activities – By extending the deadline for the start of the exemption from 3 to 5 years, investors have more room to complete the construction and organization of the accommodation structure before losing the tax exemption.
Conclusion
The change made to tax exemptions aims to support investments in tourism by giving operators more time and flexibility to benefit from fiscal incentives. However, businesses wishing to take advantage of these exemptions must carefully follow the new criteria and deadlines to avoid losing their opportunity for the 10-year exemption from corporate income tax.
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