Compliance

IOF, LGPD, and reporting — handled.

The BRL-USD payroll corridor involves Brazilian tax code (IOF code 7.11), Banco Central do Brasil foreign exchange reporting (Resolution 3.568), data protection obligations under LGPD, and Receita Federal cross-border payment disclosure requirements. BackChannel's architecture is designed with each of these frameworks in mind — and we are specific about what we support versus what remains your entity's responsibility.

IOF 7.11
Single-leg treatment
LGPD
BR data residency
IOF

IOF code 7.11: single-leg structural approach

The Imposto sobre Operações Financeiras (IOF) applies to foreign exchange transactions under code 7.11. The applicable rate is 0.38% per FX event for legal entities remitting to foreign payees.

Traditional cross-border payroll processors execute two FX events: BRL converts to an intermediary (typically USD held offshore), then routes to the final USD recipient. Two conversions = two IOF events = 0.76% total.

BackChannel's corridor is structured as a single FX event: BRL converts directly to USD. The outbound wire to the US contractor is downstream of the conversion, not a second FX transaction. One FX event = one IOF charge at 0.38%.

Structural approach, not regulatory exemption: This is a description of the operational structure of the corridor — one FX conversion event. BackChannel does not claim a regulatory exemption from IOF. IOF applies once. We describe the structural reality accurately. Consult your tax counsel for entity-specific classification under the applicable IOF regulation.
LGPD

Data residency and LGPD

Lei Geral de Proteção de Dados (LGPD — Law No. 13.709/2018) is Brazil's data protection law, governing the collection, storage, and processing of personal data of Brazilian residents.

BackChannel's data processing is designed with LGPD in mind:

  • Company and payroll data is processed and stored within Brazil
  • No personal data of Brazilian residents is transferred outside the BR-US corridor without the lawful basis of contract performance
  • US contractor data (routing numbers, name) is stored encrypted and used solely for payment processing
  • Data subjects can request access, correction, or deletion via [email protected]
BackChannel acts as data processor for your company's payroll data. Your company is the data controller under LGPD. Our Data Processing Agreement (DPA) is available on request. See our Privacy Policy for full details.
RFB

Receita Federal: RFI 1.0 reporting context

Instrução Normativa RFB 1.0 (and subsequent RFB resolutions) governs the reporting obligations of Brazilian companies making cross-border payments. Companies remitting to foreign contractors are required to report these transactions to the Receita Federal do Brasil (RFB).

BackChannel supports your company's RFI reporting workflow by:

Structured transaction records
Each payroll run generates a transaction record with CNPJ, contractor identifier, BRL/USD amounts, exchange rate, IOF paid, and timestamp — the data fields required for RFI filing.
Export-ready formats
Transaction data can be exported in CSV format compatible with RFB reporting tools. This does not constitute RFB filing — your company's tax team or accountant handles the actual RFB submission.
Accurate framing: BackChannel supports your reporting workflow by providing structured data. BackChannel is not an RFB-authorized filing agent. RFB filing obligations remain with your company. Consult your accountant or tax counsel for RFI-specific guidance.

Compliance questions about the BRL-USD corridor? Our team has worked through the IOF, LGPD, and RFB mechanics in detail.

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