TAX NEWS ALERT | Brazil – Law 15,270/2025: Dividend Withholding Tax Returns in 2026
Brazil has enacted Law 15,270/2025 (published Nov 27, 2025), reintroducing withholding income tax on dividends after nearly three decades of exemption. The new rules apply to dividends paid or remitted starting January 1, 2026, with immediate relevance for 2025 year-end planning.
What changed?
10% WHT on dividends to individuals in Brazil
Dividends paid by the same Brazilian company to the same Brazilian-resident individual above BRL 50,000 per month will be subject to 10% withholding tax (“IRRF”). The tax will be withheld at source and treated as an advance against the individual’s annual assessment.
10% WHT on cross-border dividend remittances
Dividends remitted to non-resident shareholders (individuals or legal entities), regardless of amount or jurisdiction, will be subject to 10% WHT in Brazil (“IRRF”).
Annual minimum tax for high-income individuals
Brazilian resident individuals earning over BRL 600,000 per year will fall under a new minimum effective tax regime, reaching up to 10% for income above BRL 1.2 million. The dividend WHT will work as a prepayment within this system.
Dividends to Brazilian legal entities remain exempt
The law keeps the historical exemption for dividends paid from one Brazilian legal entity to another Brazilian legal entity (no WHT).
Transition rule for profits accrued up to Dec 31, 2025
Profits generated through 2025 remain exempt if distribution is formally approved by Dec 31, 2025 and paid according to the approved schedule. Absent approval by year-end, exemption may be lost.
Combined tax burden cap introduced
A safeguard aims to prevent combined corporate + shareholder taxation from exceeding a reference corporate income tax burden in certain scenarios. Practical application will depend on regulation.
Important notes:
Cash and repatriation costs will rise in 2026. Groups with foreign shareholders should incorporate a 10% WHT leakage into distribution models.
2025 is a planning window. Approving dividend distributions by Dec 31, 2025 may preserve exemption for existing profit pools and avoid unnecessary tax exposure.
If you have any questions, please reach out to our International Tax experts - Adriano Ponciano & the dedicated team - who are available to assist your clients with presence in Brazil.
