Government Reduces Tax on Credit Transactions
Brasil
2 abril 2020

On April 2, the Executive issued Decree 10.305/2020, reducing the Financial Operations Tax (IOF, for its acronym in Spanish) rate charged on credit transactions to zero. The measure covers operations carried out between April 3 and July 3 of this year.

The decision is part of a package of measures taken in the context of the coronavirus pandemic. According to Tostes Neto, Secretary of the Internal Revenue Service, the measure will reduce the cost of credit at a time when the government is launching a large number of credit lines with reduced interest rates to help people manage during the crisis. “The government will launch a broad program of differentiated and special credit lines to help businesses in the productive sector by offering reduced interest rates,” he said. 

Until now, the IOF for credit operations was 3% per year. The new measure means the government decided to reduce this tax to zero for a period of 90 days.

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