Tax Law Highlights | Brazil's Tax On Financial Transactions (IOF) Issues (Video)

• Published date: 07 October 2025
• Law Firm: Mayer Brown
• Author: Ms Rachel Delvecchio

1. Updates in Evidence:

This edition of Tax Law Highlights addresses Decrees No. 12,466, 12,467, and 12,499, published in May and June 2025, which, in summary, increased the rates of the Tax on Financial Transactions (IOF) on a range of insurance, credit, and foreign exchange transactions. It also examines the ongoing judicial scrutiny following the resulting tax burden increases.

2. Introduction:

Decrees No. 12,466, 12,467, and 12,499/2025 introduced significant changes to the IOF taxation framework, particularly impacting the following transactions:

(i) credit transactions between legal entities;

(ii) supplier financing and payment advances ("forfaiting" or "reverse factoring"); and

(iii) foreign exchange transactions related to short-term foreign loans.

At the judicial level, Constitutional Declaratory Action...