• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 5/1/2013

Brazil - IOF rate of 0% on infrastructure project investments 

May 1:   Under decree that reduces the rate of the “tax on financial operations” (Imposto sobre Operações Financeiras—IOF) for investments in Brazil’s infrastructure sector, beginning 2 April 2013, the IOF rate is 0% with respect to certain financial transactions made for purposes of financing certain infrastructure-related projects.

Decree 7,975—effective 1 April 2013—establishes an IOF rate of 0% for investments with respect to investments relating to infrastructure-related projects, such as:

  • Electricity / power sector
  • Engineering projects
  • Logistics relating to road, railway construction projects
  • Research and development (R&D) projects
  • Projects associated with the creation of productive and technology capacity in sectors with “high knowledge” and engineering
  • Production of consumable assets for export purposes


IOF is a federal tax levied on credit, currency exchange, insurance and securities transactions executed through financial institutions—and includes intercompany loans. The tax also applies to gold transactions.

The rates of IOF can be increased / reduced by Brazil’s federal government by decree, with such changes being effective immediately. The tax base varies depending on the taxable event and the financial nature of the transaction.

Read an April 2013 report prepared by the KPMG member firm in Brazil: Tax News: 0% IOF/Credit Tax Rate – Infrastructure and Infrastructure-related Projects Financing

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