Brazil’s government publishes gradual reduction in taxes on foreign exchange operations (“IOF-FX”)
Yesterday, the Brazilian government published Decree No. 10,997 establishing that the IOF-FX rate for loan operations and issuances in the international market, as well as for the use of international credit cards and for the acquisition of foreign currency abroad will be progressively reduced to zero, up to 2029.
As a result, short-term loans and issuances in the international market (bonds) will (as of March 21, 2022) be treated similarly to other foreign investments in the country, such as investments in the financial and equity markets capital, remittance of interest on equity and dividends received by foreign investors.
In the case of operations related to the use of international credit cards and acquisition of foreign currency abroad, the reduction will be gradual.
Please look at our infographic to understand the timeframe of the changes.
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