Brief Summary – IOF Brazil

IOF tax is an abbreviation of Impostos sobre Operações Financeiras or Tax on Financial Operations. It is applied to both company and individual financial operations. For both citizens of Brazil and also for noncitizens.

It is applied to:
- Currency Exchanges
- Investments
- Insurance contracts
- Credit operations

For all financial operations done by non-citizens or non-residents of Brazil investing in Brazil, there is a one-off fee of 0,38% applied on the total sum. Additionally, there is another 15% Income withholding tax should the investment or operation generate profit. For what is called a DayTrade 20% withholding tax is applied on the profit of the operation.

All IOF operations are registered with the Central Bank of Brazil.

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0,38%

IOF Tax

7.38%

Max IOF Tax on Insurance

6.38%

Credit Card purchases

20%

DayTrade Income Tax

How is IOF and Income tax calculated

IOF tax rates are dependant on the type of financial operation and whether the person or company is Brazilian.

IOF for Brazilians

Individuals in Brazil will pay IOF tax at the following rates:

- Currency exchange 1,1% on value of operation
- For credit card purchases in foreign countries 6,38%
- Personal insurance 0,38% up to 7,38% on car insurance
- National investments 0,38% for less than 30 days and 0% when above 30 days

IOF for Foreigners

IOF tax rate will be charged at 0,38% on the value of the financial transaction.

Financial loans will accrue 6% tax if the financial loan to Brazil is less than or equal to 180 days. Above 180 days this operation is 0% tax rated.

Income Tax consultancy

At AA Tax we can do both personal income tax queries or returns and also a full operation tax analyses for any size business.

IOF BRAZIL