Changes in “IOF – Exchange” taxes
Paulo Machado (Attorney from Tax Law Department)
On the 14th of June 2012 the Decree 7.751 regulating IOF and redrafting point XXII of the Article 15-1 was published in the Official Gazette (DOU).
From that date on, the settlement of money change transactions hired from the 14th of June 2012, to inflow funds into the country, including through simultaneous operations, concerning foreign loan, subject to registration at the Brazilian Central Bank, hired either directly or by issuing bonds on the international market with an average reimbursement period up to seven hundred and twenty days, are taxed by IOF Exchange at the rate of 6%
Until then, the minimum average reimbursement period was eighteen hundred days, deadline set by Decree n° 7.698 of March 9th 2012.
Thus, loans between a parent company abroad and a subsidiary in Brazil can be made for periods exceeding 2 years, with reduced taxation.