It is common for companies within the same corporate group to transfer funds among themselves to balance cash flow or centralize payments. The issue is that, without proper legal formalization, these transactions may be interpreted by the Brazilian Federal Revenue Service as intercompany loans, which are considered credit transactions subject to IOF (Tax on Financial Operations).
The lack of an intercompany current account agreement with clear rules on offsetting and control creates exposure to tax assessments and accounting challenges.
Recent Administrative Tax Court (CARF) decisions have reinforced this position: when transactions are not properly documented, the tax authorities may presume the existence of a loan and assess IOF. Conversely, when there is evidence that the movements occur under a duly formalized current account arrangement, no taxable event arises.
If your company transfers funds between affiliates or subsidiaries, it is worth reviewing the contractual framework before the tax authorities do.
