With the approval of Bill No. 1,087/2025 in the National Congress, only presidential approval is needed for the tax to become enforceable in 2026. The legislation raises questions, but opens a window of opportunity to be seized in 2025.
By Amanda Duarte and Mauricio Nucci
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Legale Overseas, no. 959.
The Brazilian National Congress has approved Bill No. 1,087/2025, which introduces taxation on dividends and establishes new fiscal rules for high-income taxpayers, effective as of the 2026 tax year. The text, which now awaits only presidential sanction, provides for:
Withholding Income Tax (IRRF) on dividends:
- 10% rate on amounts paid to individuals exceeding BRL 50,000 per month;
- 10% tax on dividends of any amount remitted abroad.
Minimum Individual Income Tax (IRPFM):
- Applicable to taxpayers with annual income above BRL 600,000, ranging from zero to 10% for income between BRL 600,000 and BRL 1.2 million;
- Fixed 10% rate for income above BRL 1.2 million.
Regarding dividend taxation, there is a window of opportunity to be seized still in 2025: exemption on profits earned up to 2025, provided that their distribution is approved in a corporate resolution by December 31, 2025.
To ensure non-taxation, the payment or crediting of these amounts must comply with the terms defined in the shareholders’ resolution. This rule applies both to dividends paid to shareholders in Brazil and abroad.
For purposes of applying the IRPFM to high-income taxpayers, the approved bill establishes that these amounts must be paid by 2028 so that they are not included in the minimum tax calculation basis.
Although beneficial if used in 2025, the provision raises questions such as:
- To benefit from the non-taxation rule, the law requires a resolution approving the distribution of dividends in 2025. However, uncertainty remains as to whether registration during January 2026 would be permitted;
- The distribution of dividends until 2028 conflicts with the rules of the Brazilian Corporations Law (Law No. 6,404/76), which requires payment within the fiscal year in which the resolution was made; and
- Regarding profit remittances abroad, the bill does not specify a deadline for payment or crediting.
The Vaz de Almeida Advogados team is prepared to advise companies and shareholders wishing to take advantage of these opportunities in 2025.
Translation Disclaimer
This document was originally drafted in Portuguese and subsequently translated into English using artificial intelligence (AI).
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