A UK company sends USD 50,000 to its Brazilian subsidiary. The subsidiary’s finance team reports a reais amount slightly lower than expected, and the line item that explains part of the gap is called IOF. The UK team wants to understand the tax before the next transfer.
IOF is a federal tax on financial operations that applies to foreign exchange: 0.38% on most money coming into Brazil and 3.5% on most money going out, including services, while payments for imported goods are exempt. It is collected by the Brazilian institution that closes the FX.
What is IOF?
IOF stands for Imposto sobre Operações Financeiras, Brazil’s federal tax on financial operations. It covers credit, insurance, securities and foreign exchange, and the FX part is the one that affects cross-border payments.
The rules sit in Decree No. 6,306/2007. Because the rates are set by decree, the federal government can change them without a new law.
For a foreign company, IOF rarely appears on its own bank statement. It shows up as a line in the FX operation of the Brazilian counterparty, which is why it is often noticed only when the amounts do not match.
When does IOF apply to cross-border payments?
It applies whenever money crosses the border through an FX operation in Brazil. That covers payments from Brazil to abroad and funds sent from abroad into Brazil.
The rate depends on the nature of the operation, the classification recorded when the FX is closed. The same amount can pay different rates if it is an import of goods, a payment for services or an investment abroad.
Payments that never cross the border, such as a Pix between two Brazilian accounts, are not FX operations and do not carry FX IOF.
What are the current rates?
The table shows the main rates as of October 2026, under article 15-B of Decree 6,306/2007, as amended by Decree No. 12,499/2025, and article 16, I, for imports of goods. Rates can change by decree, so check them before each operation.
Operation | IOF rate
|
|---|---|
Money entering Brazil, as a general rule | 0.38% |
Export revenue entering Brazil | 0% |
Money leaving Brazil in general, including payment for services | 3.5% |
Remittance for investment abroad | 1.1% |
Payment for imports of goods | Exempt |
Who pays IOF: sender or recipient?
The tax is collected by the Brazilian institution that closes the FX operation. It falls on the Brazilian side of the operation: the party that buys or sells foreign currency in Brazil.
For a payment into Brazil, that is usually the recipient. For a payment out of Brazil, it is usually the payer. Commercially, the parties can agree in the contract or invoice who absorbs the tax and the other costs.
Want a quote with IOF included upfront? Talk to our team.
Does IOF apply to stablecoin transactions?
Decree 6,306/2007 does not address virtual assets. Companies that use stablecoins in payments involving Brazil should review the tax treatment of each operation with a tax advisor.
How do you factor IOF into the cost of a payment?
Treat IOF as one of the three cost lines of an FX operation, next to the spread and the bank fees. Unlike the other two, it does not vary by provider: it follows the nature of the operation.
Take the UK company from the opening, with an illustrative rate of BRL 5.40 per dollar. The USD 50,000 converts into BRL 270,000. At 0.38%, IOF is BRL 1,026, and the subsidiary receives BRL 268,974 before spread and fees.
If the same transfer were classified differently, the result would change. That is why the classification, not the provider, decides the IOF line. Transfero’s comparison of SWIFT and blockchain for international payments covers the other cost lines along the route.
How does Transfero help with the full cost of payments to Brazil?
Transfero’s cross-border payments run on the Transfero Payments Network (TPN), a layer that connects banking rails, blockchain networks and liquidity providers. The platform processed more than 9.8 million transactions in 2025.
Money moved globally in minutes, through Transfero’s cross-border payments
Predictable 24/7 payouts across multiple countries
More than 180 payout markets
Transfero’s guide on how to choose an international payments provider covers how to compare the total cost of each option.
Questions to ask before your next payment with Brazil
Is the payment entering or leaving Brazil?
How will the Brazilian side classify it: goods, services, investment or export revenue?
Who absorbs the IOF according to the contract or invoice?
Does the quote show IOF separately from the spread and the fees?
Have the rates changed since your last operation?
If stablecoins are involved, has a tax advisor reviewed the treatment?
Talk to Transfero about the full cost of payments to Brazil.
Frequently asked questions
Is IOF charged on payments into Brazil?
Yes, in most cases. As of October 2026, money entering Brazil pays 0.38% as a general rule. Export revenue is the main exception, at 0%. The tax is collected by the institution in Brazil that closes the FX operation, on the Brazilian side of the transaction.
Did IOF rates change in 2025?
Yes. The federal government raised IOF rates by decree in May and June 2025. Congress suspended the increase, and a decision by Brazil’s Supreme Court (STF) on July 16, 2025 reinstated it. The current rates follow Decree 6,306/2007 as amended by Decree 12,499/2025.
Is IOF refundable?
IOF is a tax on the operation itself, not a deposit. Whether any amount can be recovered after a cancellation or an error depends on the specific case. Check it with a tax advisor and with the institution that closed the FX before assuming a refund.
Does IOF apply to Pix payments from abroad?
Pix is a domestic payment system. Money coming from abroad first goes through an FX operation in Brazil, and that is where IOF applies. The Pix that delivers the reais to the recipient afterwards is a local transfer.
