The Federal Government published, in an extra edition of the Federal Official Gazette of June 11, 2025, Decree No. 12,499/2025 and Provisional Measure No. 1,303/2025, making important changes to the IOF (Tax on Financial Transactions) regime and taxation on financial investments, respectively.
Tax on Financial Operations
Although the announced aim of the measures was, in theory, to offset the budgetary effects of the potential reduction in the IOF increase published at the end of May/25, this did not happen. In addition to the fact that the reduction was not complete, there was an expansion of the hypotheses for the incidence of the IOF for investments in FIDC, a fact which had not been contemplated in previous decrees.
Below, we highlight some of the main points of the measures:
IOF-Credit
As announced, the aim of Decree No. 12,499/2025 was to recalibrate its incidence. To this end, the new rules reduced the additional rate of the IOF-Credit from 0.95% to 0.38% on credit operations for legal entities, the same level that had already been set for operations with individuals.
Still on the subject of the additional IOF-Credit rate, drawn risk/forfait operations are now considered to be exempt from its levy, subject only to the daily rate of 0.0082%. In addition, the provision that the tax payer would be the "debtor" was removed, which seems to shift the role of taxpayer (previously improperly attributed to the debtor / drawee) to the supplier / assignor of the credit.
Also on this point, it is important to note that the new wording of the IOF-Credit regulation remains silent on its application to the anticipation of receivables promoted within the scope of payment arrangements, as well as those implemented in structures with the participation of Credit Rights Investment Funds (FIDC) and Securitization Companies.
IOF-FIDCs
Although the new rules do not clarify the incidence of IOF-Credit on prepayments performed by FIDCs, they added the primary acquisition of their quotas to the scope of incidence of IOF in its Securities modality (IOF-Securities), at the rate of 0.38%, except for acquisitions made until June 13, 2025 and operations in the secondary market.
IOF-Exchange
Although the changes to the IOF in its foreign exchange modality (IOF-Câmbio) were maintained, the positive point was the express provision for a zero rate on the settlement of foreign exchange transactions for the purpose of returning funds invested by a foreign investor in equity holdings in the country, equating them to transactions carried out within the scope of the capital market.
IOF-Insurance
New criteria and limits have been set for the exemption from IOF-Insurance applicable to contributions made by individuals to VGBL-type plans.
As of Decree No. 12,499/2025, contributions made by individuals will once again be exempt from IOF up to the amount of R$ 300,000.00, per insurer, until December 31, 2025. As of January 1, 2026, the exemption will be maintained up to the amount of R$ 600,000.00/year, including contributions distributed among different insurers. For amounts exceeding these limits, the 5% IOF/Insurance rate will apply. It is important to note that contributions made by legal employers to fund life insurance for the benefit of their employees remain exempt.
It is worth remembering that the aforementioned decree had previously raised the IOF rate applicable to monthly contributions of more than R$50,000.00 from 0% to 5%, even when made in different plans and with different insurance companies.
Income Taxation on Financial and Other Income
Parallel to the publication of the aforementioned Decree, Provisional Measure No. 1,303/2025 was published, establishing a new framework for taxation on financial income, dealing with various topics such as fixed income investments, net gains on the stock exchange, investment funds, derivatives, incentivized securities, crypto-assets, as well as increasing the taxation applicable to payment institutions and the distribution of interest on equity (JCP).
IRPF - income from financial investments
The Provisional Measure establishes that individuals' income from financial investments will now be taxed at a single rate of 17.5%, with a separate declaration in the Annual Adjustment Statement (DAA). This new system repeals the previous regime of regressive rates of 22.5% to 15%.
In addition, this single rate now covers income from financial investments abroad and in virtual assets.
The positive point is that proven losses can be offset against gains of the same nature for up to five years, but only those ascertained as of 2026 follow this rule; losses up to December 31, 2025 continue to be governed by the previous legislation. It is expressly forbidden to offset losses arising from mutual fund operations.
IRPF - net gains on the stock exchange and over the counter
The net gains regime continues to apply to transactions carried out on a stock exchange or organized over-the-counter market, as long as they take place in centralized systems with public pricing and authorization from the CVM. Off-exchange futures market transactions and swaps also remain under the net gains regime, removing the typical taxation of fixed income. The Provisional Measure also consolidates the RFB's understanding that transactions with fixed-income securities on the stock exchange are not subject to the net gains system.
The tax rate will now be 17.5% with quarterly calculation, and the exemption will be maintained for sales of shares on the stock exchange of up to R$60,000 per quarter (previously it was monthly, up to R$20,000). Losses can still be offset in the quarter itself and, as of 2026, can also be offset against other income from financial investments, if there are no gains of the same kind. Losses made until the end of 2025 follow the previous rules.
Securities Lending
The Provisional Measure makes adjustments to the tax rules applicable to share lending operations and other securities, seeking to correct asymmetries and gaps identified in the current legislation.
Taxation of Virtual Assets
Gains from virtual assets (including crypto-assets and cryptocurrencies), even those in the direct custody of the taxpayer, will now be taxed at a rate of 17.5%, with quarterly calculation.
Losses can be offset in up to five subsequent quarters, but as of 2026, this offsetting will be restricted to gains on virtual assets, without cross-referencing with other applications. For real, presumed or arbitrated profit legal entities, gains are included in the IRPJ and CSLL base, and losses cannot be deducted.
Incentive applications
The Provisional Measure institutes a 5% IRRF rate on individuals' income from currently exempt investments, such as LCI, CRI, CRA, incentivized debentures and FI-Infra, FIP-IE, FII and FIAGRO shares. The change only applies to securities issued and paid in after December 31, 2025.
As a result, the stock of old bonds remains zero-rated, preserving acquired rights. The measure seeks to broaden the tax base without compromising the attractiveness of the instruments already contracted.
Investment Funds
The new general rule sets the IRRF rate at 17.5% for all funds, with or without commissions. Funds such as FIP, FIDC, FIA and ETF will now be taxed at the same rate, regardless of whether or not they qualify as an investment entity. Funds subject to the quota increase will no longer be taxed at the regressive rates and will continue to be calculated every six months, in May and November.
FIIs and Fiagro will now have a 5% withholding tax on income paid to individuals, as long as the fund has at least 100 shareholders and meets the other conditions currently required for exemption. Fixed-income ETFs will be taxed at 20% and, when composed only of incentivized assets, at 7.5% for individuals.
FIP-IE or FIP-PD&I maintain a zero rate for individual shareholders until 2025, rising to 5% after that date. Foreign shareholders continue to have a zero rate, unless they are domiciled in tax havens (25%).
Non-Resident Investor
The Provisional Measure raises the income tax rate on investments by non-residents in the financial and capital markets from 15% to 17.5%, restricting the exemption to transactions with shares, subscription warrants, subscription receipts and share deposit certificates, all of which are traded on a stock exchange or organized over-the-counter. Non-resident investors are still exempt from investing in FIPs that comply with Bacen, CVM and CMN regulations. Those domiciled in favored tax jurisdictions, on the other hand, remain taxed at a rate of 25%.
The conversion of a direct investment into a capital market investment is formally subject to income tax, calculated as the difference between the acquisition cost and the market value on the date of conversion. Conversion in the opposite direction will be exempt from taxation.
IRPJ/CSLL - general rules
Financial investments by legal entities will now be taxed at a rate of 17.5% by the IRRF, in anticipation of the IRPJ and CSLL. Losses are still deductible under general legislation. The Provisional Measure also details accounting rules for valuing fund quotas, both at equity value (with a reversible sub-account when the assets are sold) and at fair value, with taxation in accordance with current rules.
In hedge operations, losses are now deductible even in contracts with counterparties abroad, as long as they meet the RFB's technical and regulatory criteria. The zero rate for IRRF is now applicable to all derivatives used for hedging, regardless of the underlying asset.
In addition, there was an increase in CSLL from 9% to 15% for financial institutions such as payment institutions, stock exchanges and SCD/SEP. Income tax on Interest on Equity is increased from 15% to 20%. The tax on BETs is increased by 6 percentage points (from 12% to 18%), with a new specific destination for the funds collected.
Validity and effectiveness
The Provisional Measure comes into force with its publication, but with effect from January 1, 2026 for the provisions on income tax, and from September 9, 2025 for the provisions on CSLL.
It is important to note that, under the current rules, the National Congress has up to 120 days to convert the provisional measure into a law with the changes deemed pertinent. If it is not converted into law, the National Congress must regulate the effects of the legal relationships established during its validity.
BTLAW, through its Tax Consultancy division, has a team prepared and experienced to provide additional information on this subject.
For more details, please contact us: tributarioconsultivo@btlaw.com.br.