When a client abroad pays your company in dollars, the amount that lands in your account in reais is lower than the amount multiplied by the rate on the news. The difference is not one item: it is four, and each behaves differently. This piece opens up each one, shows how to fold them into a single comparable number and lists what to ask before you confirm a transaction.
The four parts of the cost
The market rate is the price of the dollar traded between institutions at that moment. It moves throughout the day and no FX provider controls that number. It is the base everything else is calculated on.
The spread is how far the rate applied to you sits below the market rate. If the market is at 5.40 and the offer gives you 5.29, the spread is about 2%. It does not appear as a separate line, because it is built into the quote. That is why it varies the most between offers and hides the most.
IOF is the Imposto sobre Operações Financeiras, Brazil’s federal tax on financial transactions, charged on every foreign exchange operation. The rate depends on the transaction purpose, that is, the declared reason for the money coming in. The provider collects the tax but does not set the amount.
The fee is what the institution charges for the service, as a fixed amount or a percentage. It shows up as its own line on the receipt. A low fee with a high spread usually costs more than a visible fee with a smaller spread.
An example with numbers
Take a payment of $10,000.00 with the market rate at R$ 5.40. The numbers below are illustrative, to show the mechanics, not a Traz price list.
| Part | How it appears | In this example |
|---|---|---|
| Market rate | Reference quote | R$ 5.4000 |
| Spread (1.2%) | Built into the applied rate | R$ 5.3352 |
| IOF | Separate line, calculated on the amount in reais | depends on the transaction purpose |
| Fee | Separate line | R$ 0.00 to R$ 60.00, depending on the institution |
| VET | Applied rate + IOF + fee, per dollar | the number to compare |
What matters is not any single line: it is the VET. Two offers can have different spreads and fees and reach the same final result. Or share the same fee and differ by hundreds of reais because of the spread.
Quick summary
Ask for the VET of each offer for the same amount, at the same time. It is the only number that already includes everything.
How to compare two offers
Compare by VET, on the same day and at the same time. The market rate moves constantly, so a quote from 10 AM and another from 3 PM say nothing about who charges more.
Ask for the preview before confirming. A serious operation shows the market rate, the applied rate, IOF, the fee and the VET before you accept. If there is no preview, the cost only appears after the reais arrive.
Check the transaction purpose. It sets the IOF rate and what goes on your receipt. Services to a non-resident, digital product sales and marketplace sales are different purposes, and the cost changes with them.
Keep the receipt. It is the document your accountant uses to close the month, and it proves which rate was applied if a number is questioned later.
What to ask before you confirm
- What is the VET for $10,000.00 right now, with IOF and fee included?
- Is the spread fixed or does it change with the amount? From what amount does it drop?
- Is there a cost to keep the account without transacting? Monthly fee, setup cost, cost per incoming payment?
- How long until the reais arrive after I confirm, and what changes that timeline?
- How do I get the receipt, and does it show market rate, applied rate, IOF and fee separately?
How Traz handles this
Traz has no monthly fee and no setup cost. The cost sits in the spread and the transaction fee, and both appear in the preview together with IOF and the VET, before you confirm. The PDF receipt repeats the same numbers after the reais are sent, for your accountant and for you.
Frequently asked questions
- What is the VET in foreign exchange?
- VET stands for Valor Efetivo Total, the all-in effective rate in reais per unit of foreign currency. It adds up the applied rate, IOF and the fee. Two offers with the same VET cost the same, however each one names its parts.
- Are spread and fee the same thing?
- No. Spread is the percentage gap between the market rate and the rate you receive, built into the quote. A fee is a fixed or percentage amount charged separately, shown as its own line on the receipt.
- Can I receive dollars without paying IOF?
- Not in a regular foreign exchange transaction. IOF is a Brazilian federal tax and the rate depends on the transaction purpose, not on who processes it. If someone promises "no IOF", ask how the transaction is classified and where the cost went.
- How does Traz show the cost?
- Before you confirm the conversion, the screen shows the market rate, the applied rate, IOF, the fee and the VET. The PDF receipt repeats those numbers after the reais are sent.