Brazil: Tax on financial transactions (IOF), increased rates

Rates of tax on financial transactions (IOF) increase

Rates of tax on financial transactions (IOF) increase

The rates of the tax on financial transactions (Imposto Sobre Operações Financeiras—IOF) increase for the period 20 September 2021 through 31 December 2021.

In Brazil, a federal tax is levied on credit, exchange, insurance, and securities transactions executed through financial institutions—including intercompany loans. The tax also applies to gold transactions.

The rates of the IOF can be increased / reduced by Brazil’s federal government by decree, with such changes being effective immediately. The tax base varies depending on the taxable event and the financial nature of the transaction.

Decree No. 10.797/2021 (published in the official gazette on 17 September 2021) reflects the following rate increases for the IOF:

  • Rate of IOF for a borrower—0.00559%
  • Rate of IOF for an individual borrower—0.01118%
  • Rate of IOF for a corporate borrower (per day)—0.00559%
  • Rate of IOF for an individual borrower (per day)—0.01118%

Read a September 2021 report (Portuguese) prepared by the KPMG member firm in Brazil

 

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