Following the negative reaction to recent IOF changes enacted by decree at the end of May, the Federal Government corrects course and proposes, as a compensatory measure, new tax rules and an increased burden on the financial market.
By Rafael Maniero and Mauricio Nucci.
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Legale Overseas, no. 937.
As previously reported, the Federal Government modified, by decree, several rates of the Tax on Credit, Foreign Exchange, Insurance, and Transactions Involving Bonds or Securities (IOF).
In response to objections raised by various sectors of society, the Government decided to ease the IOF rate in several cases and, as a counterbalance, proposed compensatory measures such as increased taxation on investments, distribution of interest on net equity (JCP), and new restrictions on the offsetting of PIS and COFINS credits.
In this context, significant changes to IOF-Credit can be observed, as shown in the table below:
| Changes to the IOF (Decree No. 12,499 of 2025) | ||
| Tax Incidence Scenario | Previous Rule | Current Rule |
| IOF on VGBL | Previous Rule: 5% for total contributions exceeding R$50,000 | 2025: Exempt up to annual contributions of R$300,000; 5% on the excess 2026: Exemption threshold increases to R$600,000 per year |
| IOF on Risco Sacado | Fixed rate of 0.38% + 0.0082% per day | 0.0082% per day (no fixed rate) |
| Credits for Legal Entities | Fixed rate of 0.95% + 0.0082% per day | Fixed rate of 0.38% + 0.0082% per day |
| FIDC | No taxation previously | 0.38% on the primary acquisition of quotas |
| Foreign Exchange Operations for the Return of Foreign Investment in Corporate Equity | 3,5% | 0% |
Despite the immediate effect of most of the new rules, the topic must be closely monitored. This is because the Chamber of Deputies has voted for an urgent procedure to analyze the possible repeal of the decrees that changed the IOF rates. There is not yet a date scheduled for the review of the matter, but it is expected to be a swift measure by the Legislative House.
At the same time, the Government has proposed compensatory measures that will primarily increase the tax burden on financial investments. This concerns Provisional Measure No. 1,303 of 2025, which represents a new framework for the taxation of financial investments.
The proposal covers taxation on fixed income investments, stock gains, investment funds, derivatives, incentivized bonds, crypto assets, as well as the increase in taxation on the distribution of interest on net equity (JCP) and on the taxation of financial institutions.
To facilitate visualization of the changes in tax rates, the following table is provided:
| Proposed Changes in Investment Taxation (Provisional Measure No. 1,303 of 2025) | ||
| Tax Incidence Scenario | Previous Rule | Current Rule |
| JCP | 15% | 20% |
| Capital gains on shares | 15% | 17,5% |
| Day trade operationsrade | 20% | 17,5% |
| Government bonds, CDBs, and LCs | From 15% to 22.5% | 17,5% |
| LCI, LCA, CRI, CRA LIG and LCD | 0% | 5% |
| Debentures | From 15% to 22.5% | 17,5% |
| Incentivized debentures | 0% | 5% |
| COE | From 15% to 22.5% | 17,5% |
| Capital gains on FII and FIAGRO | 20% | 17,5% |
| Distributions from FII and FIAGRO | 0% | 5% |
| Cryptocurrencies | From exemption to 30% | 17,5% |
Regarding financial institutions, the proposed rule provides for the inclusion of entities that until now were not subject to the list of financial institutions liable to the 15% and 20% CSLL rates. These include payment institutions, clearing and settlement entities, among others.
As this is a provisional measure, the new framework for investment taxation must be reviewed by the National Congress. If converted into law by the Legislative Branch, most of the new rules will take effect as of January 1, 2026, except for the CSLL rate increases, which will take effect from October 2025.
Furthermore, there is an important change in the rules for the offsetting of PIS and COFINS credits. From now on, credits arising from undue or excessive payments not properly supported by DARF, or credits unrelated to the taxpayer’s economic activity, will be considered as undeclared. This means the taxpayer will no longer be able to challenge them through administrative channels (via a manifestation of disagreement).
Given these new rules, it is recommended that taxpayers closely monitor the upcoming developments, to understand which measures will actually take effect and how they will be impacted.
The Vaz de Almeida Advogados team is attentively following the matter and will continue updating its clients and partners as new developments arise.
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