BlackOpal CEO Says Brazil Can Raise Some Outbound FX Tax Rates by Decree

BlackOpal co-founder and CEO Jason Dehni said Brazil’s next president could raise some IOF rates on outbound foreign-exchange transfers by decree, putting executive tax-setting authority in focus ahead of Sunday’s election.

“It’s a decree instrument, so a government can change it overnight,” Dehni said in a written interview published Friday, Oct. 23. He said the executive could act without a congressional vote. The interview identified no pending decree or tax change promised by either candidate. Dehni also said either government could revisit the rates, adding that both had used IOF before.

Brazil’s Constitution allows the executive to adjust rates on certain federal taxes, including the IOF, subject to conditions and limits set by law. Article 153, Section 1 addresses that rate-setting authority, while Item V covers taxes on credit, foreign-exchange, insurance and securities transactions. The IOF is a federal tax on financial operations. Its treatment of foreign-exchange transfers depends on the transaction category and purpose.

Current rules set a 3.5% rate for specified transfers abroad that make funds available to a Brazilian resident and a 1.10% rate for transfers made for investment. Those rates apply to defined transaction categories, not every type of money sent abroad. The figures describe separate tax treatment rather than a blanket rate on outbound transfers.

The authority faced a challenge in 2025. On June 26, Congress issued Decree Legislative 176, suspending Presidential Decrees 12,466, 12,467 and 12,499, which had changed IOF rules. On July 16, Justice Alexandre de Moraes of the Supreme Federal Court restored most of Decree 12,499 in an interim ruling. Provisions treating supplier-payment advances, or risco sacado, as credit operations subject to IOF remained suspended. The court clarified on July 18 that the higher rates did not apply to transactions made during the suspension period.

Brazil’s presidential runoff is scheduled for Sunday, Oct. 25, with President Luiz Inácio Lula da Silva and Sen. Flávio Bolsonaro on the ballot.