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Brazil: Increased rate of tax, foreign exchange transfers

Brazil: Rate of tax, foreign exchange transfers

An increase to the rate of tax imposed on foreign exchange transactions is effective 3 March 2018. The new rate is 1.10% of the foreign exchange transaction with respect to remittances of funds by Brazilian residents to their foreign bank accounts.


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

The rates of the financial transaction tax (Imposto Sobre Operações Financeiras—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.

Increased IOF rate

Decree 9,297 (published on the official gazette on 2 March 2018) makes a change to the IOF foreign exchange legislation (Decree 6,306/2007) in relation to cross-border remittances made to bank accounts held abroad by Brazilian residents.

As a result of the change, the rate of IOF is increased to 1.10%—up from 0.38%—on foreign exchange transactions for transfers of funds by Brazilian residents to their foreign bank accounts held abroad. The new rate applies beginning 3 March 2018. 

According to the Ministry of Finance, the purpose of the change was to eliminate tax distortions by applying the same IOF rate on foreign exchange transactions for both the remittance of funds to bank accounts abroad and the purchase of foreign currency by Brazilian residents. 


Read a March 2018 report (English) and (Portuguese) prepared by the KPMG member firm in Brazil

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