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With the single‑judge decision issued by Justice Alexandre de Moraes (07/16), the following rules are once again in effect:

• 3.5% IOF on international remittances
• 5% IOF on contributions to VGBL plans and life insurance
• IOF applied to international credit card transactions, foreign exchange operations, and cash currency operations

However, the government’s attempt to tax the risco sacado (a type of supply‑chain financing) was rejected. The Justice held that this operation does not constitute a credit transaction and, therefore, cannot be subject to IOF, noting that extending the tax to this structure would exceed the Executive Branch’s constitutional authority.

Practical Implications

The decision has raised concerns in the financial market, including fears of capital‑control measures and a potential uptick in offshore investments as a protective strategy. The reinstated, higher IOF rates — now valid retroactively — may significantly affect companies and investors who did not pay the tax during the suspension period.

The team at Donato & Garcia Neto Advogados is closely monitoring the evolving tax landscape and is available to advise clients on the legal, operational, and strategic consequences of this new ruling.