Brazil issued Decree No. 12.499 on 11 June 2025, repealing Decrees 12.466 and 12.467, raising financial transaction tax (IOF) rates on select insurance, credit, and forex transactions.

Brazil has published Decree No. 12.499 on 11 June 2025, which repeals Decree No. 12.466 of 22 May 2025 and Decree No. 12.467 of 23 May 2025, which had increased financial transactions tax (IOF) rates on certain insurance, credit, and foreign exchange transactions.

Decree 12.499 takes effect on 11 June 2025.

The Tax on Financial Operations (IOF) is a financial levy applied to individuals and businesses in Brazil, covering a range of financial transactions. The IOF increases were aimed at raising revenue amidst a major spending freeze, which received intense backlash.

Decree No. 12.499 keeps most IOF rates unchanged from the previous decrees, with a few key adjustments.

The IOF rate on contributions for life insurance plans with survival coverage was increased from 0% to 5% when total monthly contributions across all plans exceeded BRL 50,000. Decree No. 12.499 keeps the 5% rate but applies it if contributions between 11 June and 31 December 2025 exceed BRL 300,000 with the same insurer. From 2026, the exempt limit will be annual contributions of BRL 600,000.

Another change affects IOF rates on corporate loan transactions, which were previously raised to 0.95% + 0.0082% per day, up from 0.38% + 0.0041% per day. Decree No. 12.499 keeps the daily rate at 0.0082% but lowers the 0.95% rate back to 0.38%.

Decree 12.499 establishes a 0% IOF rate on foreign exchange transactions related to returns on investments made by foreign investors in equity interests in Brazil.

Earlier, on 23 May 2025, Brazil’s Finance Ministry scrapped a higher transaction tax on overseas investments after critics called it a step backward for capital controls.