With the IOF tax rate rising to 3.5%, understanding how to protect your margins and optimise FX costs has never been more critical. Here’s what every cross-border seller should know and the strategies that can help you stay ahead.
If you’ve seen your Brazilian order costs surge recently or noticed profits quietly eaten away by a line item called IOF,you’re not alone.
2025 has been a turbulent year for merchants selling into Brazil. In May, the government announced a sudden hike in the Tax on Financial Operations (IOF) from 0.38% to 3.5%, triggering confusion and uncertainty across the eCommerce ecosystem.
Within weeks, Congress repealed the move only for the Supreme Federal Court to reinstate the tax again in July.
The result: a rollercoaster few saw coming, and a clear reminder that policy volatility is now part of doing business in Brazil.
The IOF (Imposto sobre Operações Financeiras) is a tax applied to a wide range of financial transactions-credit, insurance, securities, and foreign exchange.
For cross-border sellers, it’s essentially a tax on currency conversion.
Every time a Brazilian customer pays using a credit card or digital wallet that converts BRL into USD (or another foreign currency), IOF is charged on that transaction.
At 3.5%, the impact can be substantial,especially for high-volume merchants managing large monthly inflows.
This IOF hike isn’t arbitrary.It reflects Brazil’s wider fiscal strategy. Facing rising budget pressures, the government has been tightening spending while seeking new revenue sources.
The Ministry of Finance estimates the new rate could add BRL 20.5 billion in revenue for 2025, and double that in 2026. At the same time, BRL 31.3 billion in non-essential public spending has been frozen.
In short: Brazil is walking a fine line,balancing fiscal control with economic growth. For global businesses, this means one thing: expect continued policy shifts and prepare for flexibility.
For merchants, IOF increases translate directly into higher transaction costs and thinner margins.
A merchant processing USD 500,000 in monthly sales to Brazilian customers could now pay an extra BRL 78,000 annually in IOF.
That’s a material hit especially when competition and logistics costs are already high. So how can businesses respond smartly?
Treat IOF as part of your financial model,not a surprise expense.
Build it transparently into your pricing or margin strategy to preserve profitability.
Practical example:
If your monthly IOF exposure is estimated at BRL 1,000 across 5,000 transactions, you could add a small BRL 0.20 “FX adjustment fee” per order, or apply a dynamic margin (e.g. +1%) to cover the cost.
This keeps pricing stable and margins predictable without shocking the end customer.
While IOF applies uniformly across payment types, your choice of transaction route can still make a difference.
Local processing paths and locally popular payment methods tend to minimise hidden FX and gateway fees.
Best practices:
Brazil’s digital payment scene is evolving fast.
Together, they highlight one key insight: localisation is not optional.It’s a competitive advantage.
At Antom, we enable merchants to integrate Pix and major local wallets such as Mercado Pago and PicPay, helping businesses accept payments securely and efficiently in Brazil’s preferred formats.
Multi-currency settlements can amplify FX exposure and IOF costs especially between BRL and USD.
Whenever possible, settle directly in BRL.
This reduces IOF exposure, simplifies reconciliation, and enhances cost visibility.
During volatile periods, consider FX hedging or forward contracts to protect profits from sharp currency swings.
Antom’s AI-driven FX models can help merchants forecast exposure more accurately and support locked-in settlement rates, keeping risks contained.
For established players, the goal is resilience,not reaction.
Adopt a phased strategy to stay agile in a shifting regulatory landscape:
What began as a technical tax issue has evolved into a broader display of political and fiscal balancing.
For international sellers, this is a timely reminder: in emerging markets like Brazil, growth opportunities are vast but so are regulatory complexities.
As tax and trade policies evolve, businesses that can anticipate, adapt, and act decisively will be the ones that thrive.
Every policy shift in Brazil sends ripples through the global eCommerce community.
Those who navigate change,not fear it, will define the next chapter of cross-border growth.
At Antom, we help businesses simplify complexity, optimise cross-border payments, and build sustainable growth strategies so you can focus on expanding confidently, no matter how the rules change.
Have you faced challenges managing overseas payments or compliance?
Share your experience through our official channels. Your insights could shape our next deep-dive analysis.
Antom - powering borderless payments and purposeful growth.