Rate raised 0.38% to 1.10% on cross-border remittances to bank accounts held by Brazilian residents abroad
Decree 9,297, published on the Official Gazette on March 2, 2018, introduced a change to the IOF/FX legislation (Decree 6,306/2007) in relation to cross-border remittances made to bank accounts held abroad by Brazilian residents.
As a result of the change introduced, IOF/FX should be levied at the rate of 1.10% on foreign exchange transactions implemented for the remittance of funds by Brazilian residents to their foreign bank accounts held abroad. The new rate should apply as from March 3 onwards. Before such change, the applicable rate was 0.38%.
According to the Ministry of Finance, the purpose of the change was to eliminate tax distortions by applying the same IOF rate on foreign exchange transactions for both the remittance of funds to bank accounts abroad and the purchase of foreign currency by Brazilian residents.
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