This is why the IOF tax has never really had any meaningful impact on the (Brazilian) real long-term.
We have seen this before, but the extra IOF taxes have not yet decreased appetite for Brazilian bonds.
It started raising the IOF tax on international bond purchases late last year.
FORBES: Brazil Companies Overdosing on Dollar Debt; Govt Puts the Breaks On
According to local press reports, the Finance Ministry is considering a 6% financial transaction tax, or IOF, on offshore lending.
The IOF tax was 5.38% on loans up to 90 days and no tax at all for longer term loans.
FORBES: Brazil Companies Overdosing on Dollar Debt; Govt Puts the Breaks On
On March 29, Mantega raised the financial transactions tax, or IOF, on local institutions that were obtaining dollar loans abroad through their offshore subsidiaries.
FORBES: Brazil Draws Line in the Sand on Currency; More Taxes Likely
The IOF estimated that doses of 800 to 1, 000 IU (20-25 mcg) or higher may be required in older adults to prevent fractures and falls but stated that more research is necessary.
As expected, Brazil imposed a 6% financial transactions (IOF) tax on offshore loans as part of a series of planned measure to curb inflation by limiting credit, and keep the local currency in check.
FORBES: Brazil Companies Overdosing on Dollar Debt; Govt Puts the Breaks On
On individual credit, the annual IOF rate will fall from 3% to 2.5% per year and Brazil is also back to cutting the Industrialized Products Tax (IPI) on white line goods such as refrigerators and washing machines.
However, companies like Brazilian mining multinational Vale, said in a conference call with analysts on Friday that it was working with the government on this issue, though it would be required to pay the new 1% finacial transaction (IOF) tax going forward.
In addition, the IOF rate on non-resident investment in long-term corporate bonds with a duration over four years is being reduced from 6% to zero, with the goal of stimulating private long-term investment and financing, the government said in a press release on Friday morning.
Alexander Gorra, head of the international department at BNY Mellon ARX in Rio de Janeiro, said that Japanese inflows into fixed assets began to slow in October 2010 when the government increased the financial operations tax, known as the IOF, for foreign buyers of government debt.
The Finance Minister, Guido Mantega, announced after market hours Wednesday that Brazil was extending to 720 days from 360 days its recent 6% financial operations, or IOF tax, on local institutional dollar borrowing from offshore subsidiaries in an attempt to cut into credit expansion and dollar inflows.
应用推荐