Brazil Tightens IOF: How New Rules Impact Your Cross-Border Payments

Brazil’s latest IOF (Portuguese Tax on Financial Transactions) changes, driven by Decree 12,466/2025, are reshaping cross-border payments, Foreign Exchange (FX) operations, and treasury activities. Although Decree 12,499/2025 later softened some hikes, the Supreme Court’s intervention has added further uncertainty, partially reinstating the rollback. 

These developments mean higher costs and more compliance complexity for companies sending money abroad, managing FX flows, or conducting corporate financial operations. In such a volatile environment, structured corporate-services support has never been more  valuable.

Key IOF Changes in Brazil

Higher IOF-Credit Rates: Tax on credit between Brazilian companies rose from 0.38% + 0.0041% per day (capped at 1.88%) to 0.95% + 0.0082% per day (capped at 3.95%) for fixed-term credit. Companies should reassess credit operations and supplier financing strategies. 

Outbound FX Rates Increased: 

• Short-term loans (up to 364 days): from 0% → 3.5% 

• Credit/debit card payments abroad: from 3.38% → 3.5% 

• Transfers to foreign accounts: from 1.1% → 3.5% (except for investments, which remain at 1.1%) 

• Acquisition of foreign currency (cash): 1.1% → 3.5% 

Forfeit Transactions Considered Credit: Advance payments to suppliers and similar financing are now treated as credit operations, impacting IOF-credit calculations. 
 
Additional Adjustments: Certain high-value pension plan contributions, micro-individual companies, and some cooperatives are subject to new IOF provisions.

Implications for Companies

• Higher Costs: Cross-border payments and FX operations are now more expensive. 

• Compliance Complexity: Companies must adapt reporting and operational processes to meet updated IOF requirements. 

• Operational Planning: Treasury teams need to revisit cash flow forecasts, investment strategies, and supplier financing. 
• Regulatory Uncertainty: Supreme Court interventions add unpredictability, making proactive oversight essential.
  
  

 
How Cresco Can Help

In a fast-changing IOF landscape, Cresco provides tailored corporate services to reduce risk and streamline operations: 
 

• Entity Setup & Registered Office: Establish compliant local entities and addresses to optimize tax and payment flows. 

• Tax & Audit Support: Manage local tax filings, cross-border reporting, and IOF compliance. 

• Corporate Governance: Handle annual filings, UBO registers, and ongoing regulatory obligations. 

• Payroll & HR (PEO/EOR): Ensure compliant payroll, benefits, and employment contracts in Brazil. 

• HR Admin & Back-Office: Streamline onboarding, attendance tracking, and leave management. 

• Tech-Enabled Oversight: Use the Honeybee platform to monitor transactions, FX exposure, and forecast IOF impact. 

• Risk & Regulatory Advisory: Stay ahead of legislative changes, optimize cash flow, and minimize legal exposure. 

With Cresco, businesses can navigate Brazil’s cross-border tax changes confidently while focusing on growth, not compliance headaches.

Stay Compliant and Efficient in  Brazil

Managing IOF changes doesn’t have to slow down your operations. Cresco’s experts guide companies through Brazil’s evolving tax landscape, providing the tools and support to optimize costs and maintain regulatory compliance. 

Contact Cresco today via the form below or at info@cresco-global.com to learn how we can help you manage cross-border payments and FX operations with confidence.