Provisional Measure 1303/2025, recently issued by the Brazilian government, proposes significant changes to the tax regime applicable to investment funds.
The subject, which has sparked debates in the financial and legal markets, brings new dynamics for managers, investors, and the very structure of the investment fund industry. This article aims to critically and objectively analyze five of the main points on the topic, highlighting both challenges and opportunities brought by the new regulatory framework.
1. Credit Funds: Change in Tax Rate Structure: The standardization of the Income Tax (IR) rate for credit funds, now set at 17.5% for all terms, eliminates the previous regressive structure, which encouraged long-term investment with minimum rates of 15%. Although this change marginally reduces returns for conventional investments, there is a relative gain for ultra-short-term funds, which were traditionally subject to higher taxation. This adjustment may drive a reconfiguration in allocation patterns for both institutional and individual investors, reinforcing these vehicles’ roles as important liquidity management tools.
2. Real Estate Funds and Fiagros: Effects of Stock Protection and Anticipation of Demand: The proposal keeps tax exemption for income from shares acquired until December 2025, but establishes a 5% tax for new acquisitions from January 2026. This new rule creates a concrete incentive to anticipate allocations, boosting short-term demand and consolidating the concept of “protected inventory.” The impact of this measure is likely to result in a significant flow of capital, especially in the second half of 2025, as investors seek to maximize tax efficiency.
3. Infrastructure Funds: Legal Ambiguity and the Need for Interpretation: Despite the explicit indication of a 5% tax on income from infrastructure debentures acquired directly from 2026 onwards, uncertainties remain regarding the extension of this treatment to infrastructure funds (FI-Infra). The lack of clarity in the wording of the MP allows for different interpretations and potential legal uncertainty. As a result, there is a trend for investors to anticipate contributions to ensure current tax benefits, at least until the competent authorities provide official guidance.
4. Private Pension Funds: Reinforced Tax Competitiveness: Under the framework proposed by MP 1303/2025, private pension plans, especially PGBL, maintain their competitiveness due to the regressive tax table that can reach as low as 10%. This advantage becomes more pronounced when compared to non-incentivized funds, which are uniformly taxed at 17.5%. Despite restrictions on annual contributions exempt from IOF, the regime remains highly attractive, especially for long-term and wealth-oriented investors.
5. FIDC: Decreased Attractiveness Due to IOF Incidence: The introduction of a 0.38% IOF tax on new subscriptions of Credit Rights Investment Fund (FIDC) shares results in an immediate negative impact. These vehicles, previously used as alternatives to mitigate the come-cotas effect, lose comparative efficiency and are expected to face reduced demand and fundraising, given the increased costs associated with allocation.
MP 1303/2025 ushers in a phase of strategic adjustments in the Brazilian investment fund market, both from regulatory and behavioral perspectives. In a context marked by regulatory challenges and opportunities, close monitoring of not only the legal text but also possible changes by the National Congress and future interpretations by the Federal Revenue Service is essential. Adaptability, technical understanding, and proactive conduct will be crucial for a smooth transition for market participants faced with the new taxation landscape for investments in Brazil.
