Brazil’s Finance Ministry plans to increase the income tax on interest on equity (JCP) payments from 15% to 20% as part of a new fiscal package.
Brazil’s Finance Minister, Fernando Haddad, announced on 10 June 2025 that the government is considering raising the income tax on interest on equity (JCP) payments to 20% from 15% as part of a new fiscal package.
The JCP serves as a method of shareholder remuneration, enabling companies to reduce their corporate tax base by deducting these payments.
Haddad confirmed the fiscal package will unify income tax rates on financial investments to 17.5%, replacing the current 15% to 22.5%. The new rate would apply to all investments, including stocks and bonds, except those currently exempt, which would now be taxed at 5%.
Haddad said the extra revenue from the package would mainly revise the earlier IOF tax hike on forfait operations.
The IOF is a financial levy applied to individuals and businesses in Brazil, covering a range of financial transactions.
Earlier, Brazil raised the financial transactions tax (IOF) on certain insurance, credit, and foreign exchange transactions to boost revenue during a spending freeze. The move faced intense backlash, leading the government to propose an alternative plan: a bill reducing federal tax breaks by 10%, with 5% cuts in 2025 and 2026.
