Brazilian Government changes IOF and proposes changes to income taxation

DECREE NO. 12,499/2025

On May 22, 2025, the Brazilian Government published Decree No. 12,466/2025, amending Decree No. 6,306/2007 to increase the rates of the Financial Transactions Tax (“IOF”) levied on credit (“IOF/Credit”), foreign exchange (“IOF/FX”) and insurance (“IOF/Insurance”) transactions.

After the amendments, the Brazilian Government reversed specific measures through Decree No. 12,467/2025. Please access our Client Alert on the amendments introduced through Decrees Nos. 12,466/2025 and 12,467/2025.

On June 11, 2025, the Brazilian Government published Decree No. 12,499/2025, which repealed Decree Nos. 12,466/2025 and 12,467/2025, partially maintaining the initial increases and implementing new changes.

PROVISIONAL MEASURE NO. 1,303/2025

Also on June 11, 2025, the Brazilian Government published Provisional Measure (“MP”) No. 1,303/2025, which updated the framework for taxation on financial investments and virtual assets in Brazil, and (i) increased the withholding income tax (“WHT“) rate related to interests on net equity (“IOE“), (ii) changed the rules governing the CSLL (one of the two corporate income taxes with the IRPJ) levied on financial institutions, (iii) increased the taxation of Brazilian fixed-odds lottery betting operators and (iv) changed the rules for recovery of tax credits.

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