Good News for Tourists: Changes in Exchange Rules and Reduction of IOF

The year started with good news for Brazilian tourists traveling abroad. Some measures have come into effect that should facilitate and reduce the cost of transactions in foreign currency. Check out the updates below.
Reduction of the Financial Operations Tax (IOF)
Since January 2, making international purchases has become cheaper, as the IOF rate has been reduced from 6.38% to 5.38%. The measure also covers international transfers and withdrawals abroad. To meet entry requirements for the Organization for Economic Cooperation and Development (OECD), the IOF will be eliminated by 2028 in Brazil, when the rate will be zeroed, as established by Decree 11.153/2022. The reduction schedule is as follows:
• 5.38% starting January 2, 2023;
• 4.38% starting January 2, 2024;
• 3.38% starting January 2, 2025;
• 2.38% starting January 2, 2026;
• 1.38% starting January 2, 2027;
• zero starting January 2, 2028.
Change in Cash Limit
On December 31, 2022, Law 14.286/21, the Legal Framework for the Foreign Exchange Market, came into effect. Among the changes brought about by the new legislation is the alteration of the cash limit to be transported when entering or leaving Brazil. The limit has changed from R$ 10,000 to US$ 10,000, or the equivalent amount in another currency.
Currency Trading Between Individuals
Another change brought by the Legal Framework is the permission for individuals to trade currencies among themselves, occasionally and non-professionally, up to the amount of US$ 500 per transaction. This measure facilitates the sale of leftover currency from a trip abroad. The expectation is that this authorization will generate a new market for services for fintechs, which can act as intermediaries in transactions between individuals.
Foreign Currency Accounts
Another provision in the law is the possibility of opening an account in foreign currency. However, this is a process that still depends on regulation and may take time to be made available by banks. Some digital banks already offer foreign currency accounts for individuals, but from platforms outside the country. This is, in fact, a good alternative for those traveling, as using a debit card or making withdrawals incurs a lower IOF than that of a credit card.
Source: FecomércioSP
Original text: http://bit.ly/3kUNMvM