By means of Legislative Decree No. 176/2025, published today in the Federal Official Gazette, the National Congress suspended Decrees No. 12,466/2025, 12,467/2025 and 12,499/2025, which had increased the rates and created new taxable events of the Tax on Credit, Exchange and Insurance Transactions (“IOF”) (see our alerts on this topic – link 1 and link 2). The Legislative Decree also reinstated the wording of Decree No. 6,306/2007 that was in force before the aforementioned changes.
At the end of May, Decrees No. 12,466/2025 and 12,467/2025 were published to increase the IOF on various financial transactions. Due to the widespread negative reaction, in June the government partially backed down on the IOF increase (Decree No. 12,499/2025). However, most of the measures were maintained, even with the simultaneous publication of Provisional Measure No. 1,303/2025, which created controversial changes to the taxation of investments, virtual assets, bets and Interest on Equity.
The overturning of the IOF increase – a revenue-raising measure implemented by the federal government in order to meet the budget target – is taking place in a context of intense discussions about the appropriate adjustments for fiscal balance and, reportedly, could lead to a discussion about the constitutionality of the legislative decree before the Supreme Court.
