On 25 June 2025, Brazil’s National Congress passed Draft Legislative Decree (PDL) No. 214/2025, suspending Federal Decrees 12,466/2025, 12,467/2025, and 12,499/2025, which increased the Tax on Financial Transactions (IOF) rates. As a result, all three decrees have been repealed.

Read more: Brazilian Government Expands Taxation Through Interim Measure and Revises IOF Rates by Decree

The first two decrees, issued in May, raised IOF rates on various financial transactions. In response to market backlash, the Federal Government partially rolled back the measures and issued Decree 12,499/2025 in early June to reduce the impact of the earlier hikes.

Congress’s decision nullifies the three federal decrees and restores the IOF rates under Decree No. 6,306/2007. The following rates are back in effect:

• Supplier Receivables Financing transactions¹: remain exempt from IOF;
• Corporate credit: subject to a fixed rate of 0.38%, plus a daily rate of 0.0041% (up to 1.88% per year);
• International credit card transactions: subject to a 38% rate, with gradual reductions through 2029;
• Foreign currency purchases: subject to a 1% rate;
• VGBL²: are exempt from IOF;

The vote on Draft Legislative Decree No. 214/2025 applies solely to the federal decrees mentioned above. It does not affect Interim Measure No. 1,303/2025, which follows a separate legislative procedure.

¹Supplier Receivables Financing refers to a structure that enables suppliers to receive early payment on outstanding invoices. In commercial transactions, buyers often negotiate extended payment terms, while suppliers may face cash flow constraints. This creates the need for early settlement through financing arrangements.

²VGBL (Vida Gerador de Benefício Livre) is a Brazilian private pension plan structured similarly to a life insurance policy with survival coverage.