Brazil’s tax on financial transactions (IOF): an overview of recent changes

New publication from Mattos Filho provides an overview of recent IOF-related disputes between Brazil's Executive, Legislative and Judicial branches, as well as the rates currently in effect

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Published on August 1, 2025

Recent changes to the Tax on Financial Transactions (IOF) have been marked by a series of complex interactions between Brazil’s Executive, Legislature and Judicial branches. The federal government issued Decrees No. 12,466/2025, 12,467/2025 and 12,499/2025 in May and June, increasing the IOF rates applicable to foreign exchange, credit, insurance and securities transactions, and also expanding the scope of the tax itself. However, Congress soon responded by issuing Legislative Decree No. 176/2025 to suspend the effects of the decrees.

In light of this conflict, the Executive and the Legislature filed proceedings at Brazil’s Supreme Court (STF), calling upon it to confirm whether or not the decrees were constitutional (via ADC No. 96 and ADIs No. 7,827 and No. 7,839, respectively). After analyzing them together, Justice Alexandre de Moraes determined interim measures to suspend rules providing for the levy of IOF on advance payment transactions of receivables to suppliers (supplier risk or forfait). On the other hand, Justice Alexandre de Moraes maintained the increased IOF rates provided for Decree No. 12,499/2025, partially opposing the initiatives of both the Executive and Legislature. Currently, the matter still awaits a final decision from the full panel of justices at the STF.

To assist in understanding these ongoing developments, Mattos Filho’s experts have released a special new publication presenting an overview of recent events and the IOF rates currently in effect.