Daniel Zugman Comments to Valor Econômico on the Taxation of VGBL Benefits upon Death Following COSIT Ruling No. 28/2026

Our partner Daniel Zugman was interviewed by Valor Econômico regarding COSIT Consultation Ruling No. 28/2026, through which the Brazilian Federal Revenue Service formalized its position on the taxation of VGBL benefits by Income Tax upon transfer by reason of death.

The Consultation Ruling consolidates the tax authorities’ position that income generated by VGBL plans is subject to Income Tax upon transfer upon death, a practice that had, in fact, already been adopted by insurance companies through withholding at source.

The issue, however, remains unsettled.

VGBL plans have always occupied a hybrid space between an insurance product and a financial investment. The central discussion is whether the taxation framework applicable to investment income during the holder’s lifetime should also apply upon succession, or whether the insurance and succession-related nature of the instrument would preclude the imposition of the tax.

The tendency is for the matter to continue generating judicial disputes, particularly in light of the divergence between the position adopted by the Brazilian Federal Revenue Service and the guidance that has been increasingly consolidated by the higher courts, which have recognized VGBL plans as insurance products in nature.

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