Legislative decree reinstates increased IOF rates imposed by the Federal Government

On June 27, 2025, Legislative Decree No. 176/2025 was published, repealing Decrees No. 12,466, No. 12,467, and No. 12,499 of 2025, which had introduced several increases in the rates of the Financial Transactions Tax (“IOF”) levied on credit transactions (“IOF/Credit”), foreign exchange transactions (“IOF/FX”) and Insurance transactions (“IOF/Insurance”)

Legislative Decree No. 176/2025 was published following a decision by the National Congress, reinstating the rates originally provided for in Decree No. 6,306 of 2007. Specifically for the insurance and reinsurance market, the IOF will again be levied as follows:

• Life insurance with survival benefit: zero rate.
• IOF/Exchange applicable to “foreign exchange transactions carried out for the transfer of funds abroad” (impacting reinsurance operations): rate of 0.38%.

The changes came into effect on June 28, 2025.

Please refer to the client alert prepared by Demarest’s Tax team for a detailed overview of all the changes introduced.

Demarest’s Insurance, Reinsurance, Private Pension and Supplementary Health, and Tax teams are monitoring the developments on this matter and remain available to provide any necessary clarifications.