IOF on Loans and Credit Cards: How it is Calculated and How to Reduce Tax
The IOF (Financial Operations Tax) is one of the taxes most charged to Brazilians, but also one of the least understood. It is embedded in personal loans, revolving card credit, foreign exchange transactions and even insurance. Many people pay the IOF without even knowing — and without questioning whether the amount is correct.
In this guide, we explain exactly what the IOF is, how it is calculated in each type of financial transaction, what rates are in force in 2026 and what legitimate strategies exist to reduce its impact. Use our IOF Calculator to simulate any operation.
What is the IOF?
The IOF (Financial Operations Tax) is a Brazilian federal tax established by Law 5,143/1966, charged on credit, exchange, insurance and securities transactions. It is an extra-fiscal tax — in addition to collecting revenue, it serves as an instrument of economic policy, being adjusted by the government to control credit and exchange rates.
Characteristics of the IOF
| Feature | Detail |
|---|---|
| Type | Extra-fiscal federal tax |
| Regulatory body | Federal Revenue of Brazil |
| Legal basis | Decree 6,306/2007 and updates |
| Incidence | Credit, exchange, insurance, securities |
| Billing method | Generally embedded in CET (Total Effective Cost) |
| Tax rate | Variable by type of operation |
IOF in Loans and Financing
In credit operations (personal loans, payroll loans, financing), the IOF has two cumulative rates:
1. Fixed Additional Rate
- 0.38% on the total value of the credit operation
- Charged once, regardless of the deadline
2. Daily Rate
- 0.0082% per day on the outstanding balance
- Limited to 365 days (after that, there is no more daily IOF)
- For legal entities: 0.0041% per day
IOF Formula in Loans
Total IOF = Fixed IOF + Daily IOF
Fixed IOF = Loan Amount × 0.38%
Daily IOF = Loan Amount × 0.0082% × Number of Days
IOF Total = Value × (0.0038 + 0.000082 × days)
IOF Table by Term (over $10,000)
| Deadline | Fixed IOF (0.38%) | Daily IOF (0.0082%/day) | IOF Total | % on the Loan |
|---|---|---|---|---|
| 30 days | $ 38,00 | $ 24.60 | $ 62,60 | 0,626% |
| 90 dias | $ 38.00 | $ 73,80 | $ 111.80 | 1,118% |
| 180 days | $ 38,00 | $ 147.60 | $ 185,60 | 1,856% |
| 365 dias | $ 38.00 | $ 299,43 | $ 337.43 | 3.374% |
| 720 days+ | $ 38,00 | $ 299.43 | $ 337.43 | 3.374% (cap) |
Important: The daily IOF has a ceiling of 365 days. Loans with a term longer than 365 days pay the same IOF as those with a term of 365 days (3.374% of the total value, including the fixed rate).
Complete Practical Example: Personal Loan
A personal loan of $15,000.00 for 180 days (6 months):
IOF Fixo = 15.000 × 0,38% = R$ 57,00
IOF Diário = 15.000 × 0,0082% × 180 = 15.000 × 0,000082 × 180 = R$ 221,40
IOF Total = R$ 57,00 + R$ 221,40 = R$ 278,40
This amount will be added to the total cost of the loan (CET), increasing the real effective rate. The financial institution generally incorporates the IOF into the value of the installments, but it is being paid by the credit borrower.
IOF on Credit Card
On a credit card, the IOF works differently depending on the modality:
Purchases on Credit (Instalments)
- There is no IOF on purchases in installments on credit, when paid within the invoice deadline. The IOF is only applicable when there is financing.
Revolving Credit and Installments with Interest
- When the invoice is not paid in full, the amount goes into revolving credit.
- 0.38% fixed + 0.0082% per day applies to the financed balance — same rates as the personal loan.
Cash Withdrawal (Credit Withdrawals)
- Withdrawals made using the credit card limit have immediate IOF of 3% to 6% depending on the bank.
- This is because the withdrawal is treated as a separate credit operation.
International and Foreign Currency Purchases
- For international credit card purchases (IOF exchange rate): 3.38% on the value converted into reais.
- Important change: from January 1, 2028 (according to Law 14,286/2021), the IOF rate on international credit cards will be progressively zeroed.
IOF in Foreign Exchange Operations
For those traveling abroad or carrying out exchange transactions:
| Type of Operation | IOF Exchange Rate |
|---|---|
| International credit/debit card | 3.38% |
| Transfers abroad (own use) | 0.38% |
| International remittances for your own account | 0.38% |
| Purchase of currency in cash (up to US$ 300 equiv.) | 1,1% |
| Compra de moeda em espécie (acima de US$ 300) | 6.38% |
| Exchange rate for import of goods | 0.38% |
| Investments abroad (funds, etc.) | 0% (since 2023) |
Tip: For international travel, prepaid cards in dollars or euros loaded in Brazil generally pay less IOF than a credit card.
IOF in Investments and Financial Applications
When redeeming short-term financial investments (up to 30 days), IOF is charged on the income obtained:
IOF Regressive Table in Investments
| Busy Days | IOF Rate on Income |
|---|---|
| 1 day | 96% |
| 2 days | 93% |
| 5 days | 83% |
| 10 days | 66% |
| 15 days | 50% |
| 20 days | 33% |
| 25 days | 16% |
| 29 days | 3% |
| 30 days or more | 0% (exempt from IOF) |
Rule of thumb: Never redeem fixed income investments before 30 days. The IOF is so high in the first few days that it can consume almost all of the income. After 30 days, the IOF is zero — only IR (Income Tax) applies.
How to Minimize the Impact of IOF
Legitimate Strategies
Prefer longer loan terms: For loans longer than 365 days, the IOF is capped at the same amount. Long-term financing dilutes the IOF into more installments.
Avoid revolving credit: It is the modality with IOF + higher interest rates combined. Always pay the full amount of the invoice.
For travel: Use cards with an international miles program that compensate part of the IOF with points, or international debit cards with lower rates.
Do not redeem investments before 30 days: The regressive IOF on financial investments strongly penalizes early redemptions.
Get to know the CET: The Total Effective Cost (CET) already includes the IOF. Compare loans by annual CET, not nominal interest rate.
Common Mistakes about IOF
Error 1: "The IOF is calculated on interest." — False. The IOF is levied on the principal amount of the credit, not on the interest.
Error 2: "I can get IOF exemption by negotiating with the bank." — False. The IOF is a federal tax. The bank does not have the power to exempt you — the Federal Government Decree does this.
Error 3: "Paying in more installments increases the IOF." — Dependent. The period (number of days) determines the daily IOF. If paying in more installments extends the total term, the IOF increases — up to a ceiling of 365 days.
Error 4: "Credit purchases abroad do not have IOF if I am exempt from IR." — False. The IOF exchange rate (3.38%) is not related to IR. They are independent taxes.
Frequently Asked Questions (FAQ)
1. What is the IOF rate on personal loans in 2026?
In 2026, the IOF rate on personal loans for individuals is a fixed 0.38% on the total amount + 0.0082% per day on the outstanding balance, limited to 365 days. The maximum IOF on long-term loans is 3.374% of the total amount financed.
2. Is the IOF charged on the gross amount of the loan or on the interest?
The IOF is charged on the principal amount of the credit (financed/released amount), not on the interest. The fixed rate of 0.38% applies to the total contracted value; the daily rate of 0.0082% is applied to the daily outstanding balance.
3. How do you know if the bank calculated the IOF correctly?
Request the CET (Total Effective Cost) Spreadsheet that the bank is required by law to provide. It discriminates the IOF separately. You can also use our IOF Calculator to check the calculation.
4. Do loans between individuals have IOF?
Technically yes — any credit operation is subject to IOF. But in practice, informal loans between individuals are rarely taxed due to the lack of supervision. Formalized loan contracts between individuals must include the IOF.
5. Is there IOF on interest-free installments on the card?
No. Interest-free installments on a credit card (made directly by the establishment) do not generate IOF, as the retailer anticipates receipt from the card operator — there is no credit operation by the bank to the consumer. The IOF only comes in when the customer finances the invoice.
6. How is IOF charged on Pix?
Transfers via Pix between accounts of individuals or companies do not have IOF. Pix is a payment system, not a credit or exchange operation. Only Pix used as a credit modality (such as "Pix Garantido" or "Pix Installments") could incur IOF.
Simulate the IOF of Your Operation
Use our IOF Calculator to accurately calculate the IOF of any financial transaction — loans, exchange or investment redemptions.
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