Decree No. 7853, published on December 5, 2012, reduced from 720 days to 365 days the average term for foreign loans benefited by the zero percent rate of the Financial Transactions Tax (IOF). Accordingly, exchange transactions relating to international loans whose maturity term is less than 365 days are subject to IOF, at a tax rate of 6%, while loans whose maturity term is higher than 365 days will be subject to IOF at a 0% tax rate.

This is a further amendment to the average term for foreign loan agreements taxed by IOF at the tax rate of zero percent during the year 2012, considering the publication of Decrees Nos. 7683, 7.698 and 7.751.

The changes introduced by the Decree No. 7853 in Article 15-A of Decree No. 6.306/07 came into force on December 05, 2012.

For more information, please contact Ivan Tauil or Roberta Caneca.