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Dividend taxation in Brazil from 2026

Last verified: 2026-10-25

Law 15,270/2025 ended thirty years of fully exempt dividends. From 1 January 2026, dividends remitted abroad bear 10% withholding, and resident individuals suffer 10% withholding when one company pays them more than BRL 50,000 in a month. Profits for 2025 and earlier whose distribution was approved by 31 December 2025 stay exempt if paid on the approved terms. A credit mechanism refunds part of the tax when the company's effective IRPJ and CSLL plus the dividend tax exceed the 34%, 40% or 45% nominal ceilings.

The rule

1. Profits or dividends paid, credited, delivered, used or remitted abroad are subject to withholding income tax at 10%.Law 9,249/1995, inserted by Law 15,270/2025, art. 10, para. 4, 2025-11-26 official text

2. Not subject to the 10% withholding: profits from results up to calendar year 2025 whose distribution was approved by 31 December 2025 and which are paid on the terms originally approved; and amounts paid to foreign governments (with reciprocity), sovereign funds as defined in Law 11,312/2006, and foreign pension entities as defined in regulations.Law 9,249/1995, inserted by Law 15,270/2025, art. 10, para. 5, 2025-11-26 official text

3. A non-resident beneficiary may opt for a credit when the paying company's effective IRPJ and CSLL rate plus the 10% withholding exceeds the nominal combined rate. The credit equals the dividends times the difference between (effective rate plus 10 points) and the applicable ceiling, and must be claimed within 360 days counted from each fiscal year, as regulated by the Executive.Law 9,249/1995, inserted by Law 15,270/2025, art. 10-A, 2025-11-26 official text

4. The nominal ceilings are 34% for companies in general, 40% for insurers, capitalization companies and the financial institutions in LC 105/2001 art. 1, para. 1, items II to VII, IX and X, and 45% for banks.Law 9,250/1995, inserted by Law 15,270/2025, art. 16-B, para. 1, 2025-11-26 official text

5. From January 2026, dividends paid by one company to one resident individual above BRL 50,000 in a single month suffer 10% withholding on the total amount paid, with no deductions. Multiple payments in the month are aggregated.Law 9,250/1995, inserted by Law 15,270/2025, art. 6-A, 2025-11-26 official text

6. From calendar year 2026 (return filed in 2027), resident individuals with total annual income above BRL 600,000 are subject to a minimum income tax rising linearly to 10% at BRL 1,200,000, with credits for tax already paid and a reducer when company plus individual tax exceeds the ceilings.Law 9,250/1995, inserted by Law 15,270/2025, arts. 16-A and 16-B, 2025-11-26 official text

7. The law took effect on publication (Official Gazette of 27 November 2025) with effects from 1 January 2026.Law 15,270/2025, art. 8, 2025-11-26 official text

8. IOF on the foreign exchange contract for the remittance of dividends and interest on equity received by a foreign investor is zero.Decree 6,306/2007, art. 15-B, item XIII, 2007-12-14 official text

Worked example

A foreign parent receives BRL 1,000,000 of dividends from 2026 profits (about USD 198,503). Withholding at 10% is BRL 100,000 (about USD 19,850). If the Brazilian subsidiary's effective IRPJ and CSLL rate for that year was 30%, then 30% plus 10 points is 40%, which exceeds the 34% ceiling by 6 points, so the parent may claim a credit of BRL 60,000 (about USD 11,910), subject to the regulations. If the effective rate was 20%, the sum is 30% and no credit is due. Resident individual: BRL 80,000 paid in one month by one company triggers BRL 8,000 withholding (10% of the full BRL 80,000, not only the excess over BRL 50,000). USD at the BCB PTAX selling rate of 23 October 2026, BRL 5.0377 per USD.

Step by step

Map every distribution against the transition rule: identify 2025 and earlier results, confirm the approval act was dated by 31 December 2025, and keep paying on the original schedule.
Update the remittance workflow so the bank and the paying company withhold 10% and pay the tax before or at the remittance.
Compute the paying company's effective rate each year (IRPJ and CSLL due over accounting profit) to assess the art. 10-A credit for foreign shareholders.
For founders and resident shareholders, model the BRL 50,000 monthly threshold and the annual minimum tax together; the monthly withholding is a prepayment of the annual minimum.
Check the dividend article of any applicable tax treaty and its protocol now that Brazil taxes dividends again.

Common traps

Treating the BRL 50,000 threshold as an allowance: once crossed, 10% applies to the whole monthly amount.
Changing the payment terms of 2025 approved dividends: the exemption depends on payment occurring on the terms originally approved.
Assuming the credit is automatic: the law makes it optional and dependent on regulation and a claim within 360 days.
Forgetting that interest on equity (JCP) is taxed separately at 17.5% from 2026.

Sources

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