As of January 2, next Monday, the IOF (acronym for Tax on Financial Operations) on international purchases will be reduced to 5.38%. This change follows the decree by the government in March of this year, whose objective is to zero the IOF by 2028. The measure is one of the requirements of the Organization for Economic Co-operation and Development (OECD) for countries to join the bloc.
The discussion on Brazil’s accession to the OECD began on January 25, 2022. The reduction in the rate will facilitate international purchases and travelers in foreign countries. The tax also applies to other financial transactions, such as bank loans and insurance — they will also be zero, but the rates vary.
Credit card IOF will be reduced to 5.38%
The IOF reduction schedule, presented by the federal government in March, shows that the tax charged on international purchases will have a 1% reduction on every January 2nd until it is zeroed in 2028.
With these reductions — and the future extinction of the IOF — foreign investment in Brazil is expected to increase, in addition to the integration of the country’s economy into the international scenario.
For ordinary citizens, the IOF reduction will benefit purchases of imported products by credit card, reducing the final value of the purchase. The same goes for using the card for purchases made during international trips and withdrawals abroad.
The IOF rates for other taxes are:
- 1.1%: purchase of foreign currency and bank operations for accounts abroad
- 0.38%: other exchange operations
The first IOF to be zeroed was that of loans made abroad for a period of 180 days. All other financial operations will have the tax extinct in 2029 — and let the generation come that will not know that the elderly had to pay 6.38% on international purchases.
Deadline for reduction of IOF on credit card
| From 6.38% to 5.38% | As of January 2, 2023 |
| From 5.38% to 4.38% | As of January 2, 2024 |
| From 4.38% to 3.38% | As of January 2, 2025 |
| From 3.38% to 2.38% | as of January 2, 2026 |
| From 2.38% to 1.38% | as of January 2, 2027 |
| From 1.38% to 0% | as of January 2, 2028 |
https://tecnoblog.net/noticias/2022/12/30/iof-vai-baixar-para-538-em-compras-no-exterior-em-janeiro-de-2023/