Brazilian financial market challenges FIDC regulations and IOF taxes

Financial market executives and associations in Brazil are challenging new regulations and tax burdens affecting Receivables Investment Funds (FIDC). Market representatives, including the Brazilian Special Situations Association, ABVCAP, and ANFIDC, have approached the Ministry of Finance, the Central Bank, and the CVM to request changes to a resolution that prohibits FIDCs from purchasing rights over judicial or arbitration claims that have not yet reached a final judgment. They are seeking a suspension or postponement of this rule, currently set for October 13.

Additionally, the National Confederation of Financial Institutions (FIN) has filed a request with Supreme Federal Court Minister Alexandre de Moraes to suspend the collection of IOF (Tax on Financial Operations) on FIDCs. FIN argues that the current tax structure creates a distortion and results in double taxation, as credit operations acquired by the funds are already subject to daily IOF. The entity contends that the tax serves a revenue-raising purpose rather than a regulatory one, potentially increasing production costs and consumer prices.