Brazil made substantial modifications to its Tax on Financial Operations (IOF) through Decree No. 12,466, which went into effect on May 23, 2025. These changes will have a direct effect on your financial operations, foreign transactions, and maybe your pricing strategies if you are a software vendor, B2B service provider, or SaaS company doing business in or with Brazil.
Brazil's financial transaction tax, known as the IOF (Imposto sobre Operações Financeiras), has an impact on everything from foreign exchange transactions to credit operations. You've probably previously encountered IOF in one way or another as a digital firm that deals with Brazilian clients, foreign payments, or subscription billing. These taxes have been substantially increased and their application is expanded under the new order.
The changes are expected to increase revenue by R$20.5 billion in 2025 and R$41 billion in 2026. Higher transaction costs from businesses and consumers will directly contribute to this income rise, so it is imperative that SaaS and B2B organizations comprehend and prepare for these developments.
The standardization of IOF rates on foreign exchange operations at 3.5% is arguably the biggest shift for global SaaS and B2B businesses. Now, this one tariff is applicable to:
This is a significant cost increase for SaaS firms that receive payments from Brazilian clients or pay Brazilian suppliers. You should anticipate that your expenses will increase to the new 3.5% level if you are now paying lower IOF rates on specific kinds of overseas transactions.
A tiered approach to IOF on credit operations is introduced by the decree:
Regarding Companies Under Simples Nacional (including MEIs):
Incorporate these higher expenses into your financial strategy if your Brazilian operations or subsidiary depend on local credit facilities.
Supplier financing activities, such as "forfait" and "risco sacado" arrangements, will be regarded as credit operations subject to IOF as of June 1, 2025.
B2B businesses that offer extended payment terms to clients through financial institutions or have advance payment agreements with suppliers are especially impacted by this change.
Since IOF rates are rising for a variety of transaction types, you must:
For companies with significant Brazil exposure, consider:
The cost of foreign transactions will be greater for Brazilian customers. Maintaining client connections while justifying any required pricing modifications can be achieved by open and honest communication about these government-imposed changes.
These IOF revisions are a component of Brazil's larger fiscal policy measures, which also include a budget freeze of R$31.3 billion. Businesses will be largely responsible for the immediate cost burden, even though the government is interested in promoting monetary policy goals and stabilizing the economy.
The secret for B2B and SaaS businesses is preemptive planning and strong partnerships with complete eCommerce platforms as the Merchant of Record. Evaluate your company in Brazil, comprehend your exposure to the IOF, and modify your plans as necessary. Ignoring the changes could have a big effect on your bottom line because they are so large.
Working with a Merchant of Record like PayPro Global can help SaaS, software, and video games developers simplify their work tremendously. You are fully covered when it comes to tax changes.
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The new standardized IOF tax of 3.5% on all foreign exchange transactions is the biggest modification. For SaaS companies that bill Brazilian clients in foreign currencies, this single rate directly raises prices for cross-border remittances and international credit card payments.
There is currently a tiered structure in place. Regular businesses must pay a flat cost of 0.95% in addition to a daily rate of 0.0082%. Companies operating under the Simples Nacional regime pay the same flat cost plus a reduced daily rate of 0.00274%. Your financial projections need to account for these additional expenses.
The majority of the IOF changes became effective on May 23, 2025. The new rules classifying supplier financing as credit operations will begin on June 1, 2025.
Examine your pricing tactics and think about passing on or absorbing the costs to lessen the impact. Investigating regional payment options may also prove to be more economical. A Merchant of Record can handle these issues for you for a comprehensive solution.
Yes, the 3.5% IOF rate on all international transactions will result in greater expenses for your Brazilian clients. To keep customers' faith, it's critical to make it clear that these price adjustments are mandated by the government.
These are supplier financing methods. As of June 1, 2025, they are reclassified as credit operations under the new law. This means they are now subject to the new IOF tax rates for credit, impacting B2B companies that use them.