Tax & Spend

Brazil Walks Back Offshore Funds Tax After Investor Blowback

The ministry, led by Fernando Haddad, had estimated that the new tax plan would reap 20 billion reais ($3.5 billion) in 2025 and 41 billion reais in 2026. — The ministry, led by Fernando Haddad, had estimated that the new tax plan would reap 20 billion reais ($3.5 billion) in 2025 and 41 billion reais in 2026.
Photographer: Arthur Menescal/Bloomberg

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By Martha Beck

May 23, 2025 at 3:12 AM UTC

Updated on

May 23, 2025 at 7:51 PM UTC

Brazil’s Finance Ministry scrapped plans to tax transfers to offshore funds only hours after the announcement of the levy led to a selloff in the currency.

In a post on X just after 11:30 p.m. local time Thursday, the ministry said it had concluded after “dialogue and technical evaluation” that the tax known as IOF would return to zero for the transfers. That compared with the 3.5% rate it had announced earlier.