Taxation: the IR regressive table and IOF

Most taxable fixed income in Brazil is taxed on a regressive table — the longer you hold, the lower the income-tax (IR) rate on your gains. Tax is withheld automatically at redemption, so the figures you see are already net of it.

The regressive IR table

At the time of writing, the bands are as follows. These rates are set by law and can change — always check the current table before relying on them.

Held up to 180 days:        22.5%
181 to 360 days:            20.0%
361 to 720 days:            17.5%
More than 720 days:         15.0%

The tax applies only to your gain, not the principal. Holding past the two-year mark drops you to the lowest 15% band — a strong reason to align maturities with longer goals.

IOF — the early-exit tax

The IOF (Imposto sobre Operações Financeiras) applies only if you redeem within the first 30 days, on a sliding scale that starts very high on day one and reaches zero by day 30. In practice, simply holding any taxable investment for at least a month avoids IOF entirely.

The exemptions to remember

At the time of writing, returns from these are exempt from income tax for individuals:

Poupança
LCI and LCA
Debêntures incentivadas
CRI and CRA

This exemption is why a lower-headline tax-free instrument can beat a higher-headline taxable one — exactly the conversion shown in the LCI/LCA and net-return lessons.

Putting it together

For taxable instruments, holding longer both compounds more and lands a lower tax rate.
Avoid redeeming inside 30 days to dodge IOF.
For exempt instruments, compare on a gross-equivalent basis.

Tax law changes periodically — treat every rate here as "current at the time of writing" and verify against official sources before making decisions.