The Tax on Financial Operations (IOF) is a financial levy applied to individuals and businesses in Brazil, covering a range of financial transactions.
Brazil has issued Decree No. 12.466 of 22 May 2025, which increases the financial transactions tax (IOF) rate on specific insurance, credit, and foreign exchange transactions.
The IOF is a financial levy applied to individuals and businesses in Brazil, covering a range of financial transactions.
The rates are as follows:
Corporate loan transactions
The tax on loans to corporate borrowers has increased to 0.95% + 0.0082% per day, up from 0.38% + 0.0041% per day.
Card and prepaid foreign exchange
The rate for foreign exchange transactions involving credit/debit cards, travellers’ checks, and international prepaid cards is raised to 3.5%, up from 3.38%.
Short-term foreign loans
A new 3.5% rate is introduced for short-term foreign loans with an average term of up to 364 days. Previously, the rate was 0%.
Transfers to foreign accounts
Transfers of funds to foreign bank accounts held by residents are now taxed at 3.5%, up from 1.1%. However, the 1.1% rate remains for transfers made for investment purposes.
Cash foreign currency purchases
The tax on acquiring foreign currency in cash has increased to 3.5%, from the previous 1.1%.
Life insurance contributions
A new 5% tax applies to monthly contributions for life insurance plans with survival coverage, if the total contributed amount exceeds BRL 50,000. This is an increase from the previous rate of 0%.
General IOF rates
The General IOF rates apply to foreign exchange transactions that are not otherwise exempt or assigned specific rates.
- Outbound transactions
-
- A 3.5% IOF tax rate is applied to outbound foreign exchange transactions.
- Inbound transactions
- A 0.38% IOF tax rate is applied to inbound foreign exchange transactions.
Other rates:
Elimination of the IOF-FX reduction plan
The gradual reduction of the IOF-FX tax on foreign exchange transactions to 0% by 2 January 2029 has been revoked.
Temporary revocation of 0% IOF for investment funds
Decree No. 12.466 revoked the 0% IOF rate on foreign exchange transactions for investment funds, both inbound and outbound. The Decree No. 12.467 of 23 May 2025 reversed the revocation, reinstating the 0% IOF rate for investment funds and the 1.1% rate for funds transferred for investment purposes.
