At Husky, we like to explain everything to our clients very well, so let's talk a little about the Tax on Financial Transactions (IOF) and how it can affect your international payments.
Who should pay it?
The IOF, established by Decree 6,306/2007 in Brazil, is paid by individuals and legal entities on financial transactions involving loans, foreign exchange, insurance, or securities.
And your international payments?
The IOF is a tax charged as a percentage of the transaction. Therefore, the more you receive from abroad, the higher the IOF tax will be charged in reais. The cost of the IOF has increased in recent years in some specific cases, as determined by the State, but it remains tied to a percentage.
In cases of service provision, the IOF may even be waived. This means that, if you provide services to an international company, there is an exemption from IOF, according to government specifications (Decree 6,306 of 2007, art. 15-B, item I).
