In a decision rendered yesterday in the injunction filed in the Declaratory Action of Constitutionality 96/DF, Supreme Court Justice Alexandre de Moraes upheld Decree No. 12.499/2025, which increased the Tax on Credit, Exchange and Insurance Transactions (“IOF”) – see our client alert on the matter for more information. However, the levy of the tax on forfaiting transactions was eliminated.
Moraes emphasized that ‘the Federal Constitution guarantees the President of the Republic the possibility of issuing a decree modifying the IOF rates’, which has an extra-fiscal nature, ‘provided, however, that it complies with the strict limitations laid down in the legislation‘. According to the Justice, ‘there was no evidence of any misuse of purpose in modifying the rates‘, as the decree was drafted in accordance with constitutional rules and did not exceed the legal limits set out in Law No. 8,894/1994, which regulates the IOF.
The decision states that the collection of IOF at new rates has an ‘ex tunc’ effect, meaning it is valid as from the publication of the presidential decree, on 11 June 2025. The decision is yet to be submitted to the STF plenary, but no date has yet been set for its analysis.
As a result, Legislative Decree No. 176/2025, approved by the National Congress last month to suspend the IOF increase, ceases to be effective and Decree No. 12,499/2025 is reinstated, except for the provisions relating to forfaiting.
