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IOF in Brazil: the tax on FX, credit, insurance and securities transactions, with the 2025 rates upheld by the Supreme Court

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Last verified: 2026-10-27 · Status: Changing

IOF is a federal tax on foreign exchange, credit, insurance and securities transactions whose rates the Executive can change by decree, so it works as a policy lever on capital flows. Since Decree 12,499 of 11 June 2025, restored by a Supreme Court (STF) injunction of 16 July 2025, most outbound FX not listed elsewhere bears 3.5 percent, foreign loans with an average term up to 364 days bear 3.5 percent, while dividends out and the return of direct investment bear zero; other inbound FX bears 0.38 percent. Loans between companies, including intercompany loans, bear credit IOF of 0.0082 percent a day (capped at 365 days) plus 0.38 percent, so a long loan costs about 3.38 percent up front.

USD figures use the Banco Central do Brasil PTAX selling rate of R$5.5007 per US dollar for 26 October 2026, the latest rate published when this page was verified. Conversions are for orientation only; the rate on the day of each FX contract will differ.

Key facts

IOF on outbound FX not exempt and not listed elsewhere3.5 %Decree 6,306/2007 art. 15-B item XXIV (Decree 12,499/2025), as of 2026-10-27 · in force
IOF on inbound FX not exempt and not listed elsewhere0.38 %Decree 6,306/2007 art. 15-B item XXV (Decree 12,499/2025), as of 2026-10-27 · in force
IOF on FX for dividends and interest on equity remitted to foreign investors0 %Decree 6,306/2007 art. 15-B item XIII, as of 2026-10-27 · in force
IOF on FX for the return of foreign direct investment0 %Decree 6,306/2007 art. 15-B item XVII-A (Decree 12,499/2025), as of 2026-10-27 · in force
IOF on inbound foreign loans with average term up to 364 days3.5 %Decree 6,306/2007 art. 15-B item XII (Decree 12,499/2025), as of 2026-10-27 · in force
Credit IOF daily rate for legal entity borrowers0.0082 % per dayDecree 6,306/2007 art. 7 item I (Decree 12,499/2025), as of 2026-10-27 · in force
Additional credit IOF regardless of term0.38 %Decree 6,306/2007 art. 7 § 15, as of 2026-10-27 · in force
Statutory ceiling for IOF on FX25 %Decree 6,306/2007 art. 15, as of 2026-10-27 · in force

The rule

1. Constitutional basis and flexibility: the federal government levies IOF on credit, FX and insurance operations and on securities, and the Executive may change its rates by decree within the limits set by law, without waiting for the next fiscal year.Constitution of the Federative Republic of Brazil of 5 October 1988, Art. 153 item V and § 1, 1988-10-05 official text · verified 2026-10-27
2. FX taxable event and collection: IOF on FX is due on settlement of the FX operation. Buyers and sellers of foreign currency in transfers to or from abroad are the taxpayers, and the bank or other institution authorized to operate in FX collects it. The statutory ceiling is 25 percent.Decree 6,306 of 14 December 2007 (IOF Regulation), Arts. 11, 12, 13 and 15, 2007-12-14 official text · verified 2026-10-27
3. Current FX rates under Decree 12,499: 3.5 percent on card purchases and ATM withdrawals abroad, travel cards, purchase of foreign cash, transfers to place funds at the disposal of a resident abroad, inbound foreign loans with an average term of up to 364 days, and any other outbound FX not exempt and not listed in items I to XXIII; 1.1 percent on transfers abroad by a resident for investment; 0.38 percent on any other inbound FX not listed; zero on the return of foreign direct investment (item XVII-A). Decree 12,499 also revoked the gradual reduction schedule of art. 15-C.
Cost to do it: 3.5 percent of the reais paid on an outbound FX contract in the residual item
Example: Outbound FX of R$550,070 in the residual item: IOF R$19,252.45 / US$100,000 sent abroad in the residual item: IOF US$3,500Decree 12,499 of 11 June 2025, amending Decree 6,306/2007, Art. 15-B items VII, IX, X, XII, XX, XXI, XXI-A, XXII, XXIV, XXV and XVII-A; art. 2 (revocation of art. 15-C), 2025-06-11 official text · verified 2026-10-27 · changed: Decrees 12,466 of 22 May 2025 and 12,499 of 11 June 2025 raised most outbound FX rates to 3.5 percent; Legislative Decree 176/2025 suspended them; on 16 July 2025 the STF restored Decree 12,499 from its issue date, ad referendum of the Plenary.
4. Zero rates that matter to foreign investors were kept: export revenue inflows, foreign loans other than those up to the term in item XII, remittances of interest on equity and dividends to foreign investors, inflows and returns of foreign investors in the financial and capital markets, and payments for imported goods, which are exempt.
Example: Dividend of R$5,500,700 remitted abroad: IOF zero (income tax withholding is a separate charge) / US$1,000,000 dividend: IOF zeroDecree 6,306 of 14 December 2007 (IOF Regulation), wording of art. 15-B given by Decree 8,325/2014, Art. 15-B items I, XI, XIII, XVI and XVII; art. 16 item I, 2007-12-14 official text · verified 2026-10-27
5. Short term foreign loans: if a loan registered as having a longer average term is repaid early so that it breaks the minimum term, IOF at the item XII rate becomes due on the original inflow, with late interest and a fine.
Cost to do it: 3.5 percent of the principal brought in
Example: Loan of R$5,500,700 with average term up to 364 days: IOF R$192,524.50 / US$1,000,000 loan: IOF US$35,000Decree 6,306/2007, Art. 15-B §§ 2 and 3, 2007-12-14 official text · verified 2026-10-27
6. Supreme Court position: in ADC 96 the rapporteur restored Decree 12,499/2025 with effect from its issue (ex tunc), ad referendum of the Plenary, keeping suspended only the rules treating supplier finance (risco sacado) as credit, in art. 7 §§ 15, 23 and 24. On 18 July 2025 he clarified that the higher rates do not apply to operations carried out while the decree was suspended. As of the latest docket entries (26 August 2026) the case is with the rapporteur and no Plenary judgment is recorded.STF, ADC 96 (with ADC 97 and ADI 7827), monocratic decisions of 16 and 18 July 2025, Interim measure, 2025-07-16 official text · verified 2026-10-27
7. Credit IOF covers loans between legal entities and between a legal entity and an individual, not only bank loans; the borrower is the taxpayer and the lending legal entity collects and pays it. For a loan with a defined principal the base is the principal, and the daily rate is capped at 365 days.Decree 6,306/2007, based on Law 9,779/1999 art. 13, Art. 2 item I c; art. 3 § 3 item III; arts. 4 and 5 item III; art. 7 item I b and § 1, 2007-12-14 official text · verified 2026-10-27
8. Credit IOF rates for legal entity borrowers: 0.0082 percent a day, plus an additional 0.38 percent regardless of term; the 2025 wording of the additional rate paragraph remains suspended by the STF, and the 0.38 percent additional stays in the earlier wording. Simples Nacional companies borrowing up to R$30,000 pay 0.00274 percent a day.
Cost to do it: About 3.38 percent of principal for a loan of one year or more (2.993 percent capped daily rate plus 0.38 percent)
Example: Intercompany loan of R$1,000,000 for two years: IOF R$29,930 daily part plus R$3,800 additional = R$33,730 / Same loan: about US$6,131.95Decree 12,499 of 11 June 2025, amending Decree 6,306/2007 art. 7, Art. 7 item I a and b, item VI and § 15, 2025-06-11 official text · verified 2026-10-27
9. Insurance: from 1 January 2026, individual contributions to survival coverage life plans (VGBL) above R$600,000 a year across all plans bear 5 percent IOF on the excess; employer contributions for employees are exempt. Primary subscriptions of credit receivables fund (FIDC) quotas bear 0.38 percent.Decree 12,499 of 11 June 2025, amending Decree 6,306/2007, Art. 22 § 1 item I e and j, items V and VI; art. 32-D, 2025-06-11 official text · verified 2026-10-27
OperationRateItem
Export revenue inflows0%I
Foreign loan inflows, average term above 364 days0%XI
Foreign loan inflows, average term up to 364 days3.5%XII
Remittance of dividends and interest on equity0%XIII
Foreign investor inflows and returns in financial and capital markets0%XVI and XVII
Return of foreign direct investment0%XVII-A
Payment for imported goodsExemptArt. 16 item I
Purchase of foreign cash; cards and travel cards abroad3.5%VII, IX, X, XX
Resident's transfer abroad for investment1.1%XXI-A
Other outbound FX not listed3.5%XXIV
Other inbound FX not listed0.38%XXV

IOF on FX by operation (Decree 6,306/2007 art. 15-B as amended by Decree 12,499/2025; STF ADC 96 injunction of 16 July 2025)

Worked example

  • A Brazilian subsidiary pays a US$100,000 fee abroad for a service with no specific item in art. 15-B. The bank charges IOF of 3.5 percent on the reais converted: R$19,252.45 (US$3,500), on top of income tax withholding and the other taxes on imported services.
  • The same subsidiary later remits a US$1,000,000 dividend: IOF on that FX contract is zero, and the return of the parent's direct investment capital is also zero rated.
  • The parent lends the subsidiary US$1,000,000 for 12 months: the inflow bears 3.5 percent (US$35,000). Structured with an average term above 364 days, the FX IOF is zero, but early repayment that breaks the term triggers the 3.5 percent with interest and a fine.
  • A Brazilian company lends R$1,000,000 to a sister company for two years: credit IOF is about R$33,730 (US$6,131.95), collected by the lending company.

Step by step

  1. 1. Before each FX contract, identify the art. 15-B item that fits the operation and ask the bank how it will classify it; the bank collects the tax at settlement.
  2. 2. For intercompany funding, compare a foreign loan with average term above 364 days (zero FX IOF), a capital contribution, and a domestic loan (credit IOF about 3.38 percent for a year or more).
  3. 3. Track the minimum term of foreign loans in the Central Bank registration and avoid early repayment that breaks it.
  4. 4. Book credit IOF on intercompany current accounts monthly where the principal is not fixed (sum of daily balances).
  5. 5. Watch ADC 96 at the STF and new decrees: rates can change overnight by decree and take effect on publication.

Common traps

  • IOF rates change by decree with immediate effect; Decrees 12,466 and 12,499 of 2025 raised outbound FX rates within three weeks of each other.
  • The STF restored the 2025 rates by an interim decision that still awaits Plenary referendum; a different final outcome could change rates again.
  • Intercompany current accounts and cash pooling between Brazilian companies are loans for IOF purposes, collected by the lender.
  • Repaying a long foreign loan early can retroactively trigger 3.5 percent on the original inflow, plus interest and a fine.
  • Zero IOF on dividends does not mean zero tax: dividends paid abroad bear 10 percent income tax withholding from 2026 (see the dividend page).

Sources

Related pages

Related: Brazil country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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