Brazilian Superintendence of Private Insurance flags IOF decree change imposing a 5% tax on high-value VGBL contributions

The Brazilian Superintendence of Private Insurance (SUSEP) has reported a change to Brazil’s Financial Transactions Tax (IOF) rules affecting Vida Gerador de Benefício Livre (VGBL) plans, introducing a 5% IOF charge on individual contributions above specified thresholds. From 1 January 2026, IOF at 5% will apply to annual contributions made by individuals to fund VGBL plans when the insured’s total contributions exceed BRL 600,000, including where contributions are split across different insurers or entities. For 2025, the decree applies a 5% IOF rate to contributions made by individuals between 11 June 2025 and 31 December 2025 to fund VGBL plans with the same insurer when total contributions exceed BRL 300,000. In both cases, the tax is levied only on the amount above the relevant threshold, and it does not apply where premiums are paid by a corporate employer for an individual employee; SUSEP noted there are no changes for other supervised products such as traditional insurance, PGBL plans or capitalisation products.