Brazilian Federal Revenue Will No Longer Charge IOF
The Brazilian Federal Revenue will no longer charge the IOF on foreign exchange transactions related to the entry of export revenues in Brazil.
The Federal Revenue of Brazil, most commonly referred to as Receita Federal is the Brazilian federal revenue service agency and a secretariat of the Ministry of the Economy. The bureau has the role of administrating tax collection and the customs of Brazil.
In a press release published on Wednesday a consultation solution to clarify exporters on the incidence of IOF and reformulate their understanding from last year.
According to the CNI, at the end of last year, the Revenue began to demand the payment of 0.38% on foreign exchange that entered the country.
At the time, the IRS’s interpretation was that the exemption would be restricted to those who internalised the export revenue on the same day of the export operation.
According to the CNI Export Competitiveness Forum, companies were unable to perform the export exchange operation on the same day.
At the time, CNI estimated losses of $ 3.7 billion to exporters this year, if the decision was upheld. According to Constanza, companies have even filed lawsuits against the IRS to maintain the exemption.
According to the consultation solution published in the DOU, in the case of foreign exchange operations related to the entry of goods and services export revenues into the country, the IOF tax rate is zero. However, deadlines must be met for companies to be exempt, according to the rules of the CMN and the Central Bank.
According to the document, the export exchange liquidation contract shall be entered into for prompt or future settlement, prior or subsequent to the shipment of the goods or the rendering of the service, observing the maximum period of 750 days between the export operation and liquidating the exchange contract in order to receive the export revenue.