Brazil’s National Congress approved the draft legislative decree on 25 June 2025, repealing three presidential decrees that increased IOF tax rates.
Brazil’s National Congress (both the Chamber of Deputies and Senate) has approved Draft Legislative Decree No. 214/2025 on 25 June 2025, repealing three presidential decrees that had raised Tax on Financial Operations (IOF) tax rates.
The decree was published as Legislative Decree No. 176 of 26 June 2025 in the Official Gazette on 27 June 2025.
Legislative Decree No. 176 suspends Decrees No. 12.466 (22 May 2025) and No. 12.467 (23 May 2025), which had raised financial transactions tax (IOF) rates on insurance, credit, and foreign exchange transactions.
Decree No. 12.499 of 11 June 2025, which replaced earlier decrees with adjustments, is now suspended.
The Legislative Decree, effective upon publication, reinstates IOF rates as they were before 22 May 2025.
However, this is not retroactive, so the rates of the suspended Decrees remain valid until they are suspended or replaced.
The IOF is a financial levy in Brazil applied to both individuals and businesses across various financial transactions. Recent IOF increases were introduced to boost government revenue during a significant spending freeze, sparking widespread criticism and backlash.
Earlier, on 23 May 2025, Brazil’s Finance Ministry scrapped a higher transaction tax on overseas investments after critics called it a step backwards for capital controls.
