Brazil has recently approved a relevant amendment to the tax framework applicable to the distribution of dividends, with a direct impact on payments made to non-resident shareholders. This regulatory update introduces a new tax treatment that should be taken into account by groups and entities with investments in the country.

What has changed?

Law No. 15,270/2025 introduces a new tax treatment for dividends distributed by Brazilian companies to non-resident shareholders. Such dividends become subject to withholding tax at source, in accordance with Brazilian domestic legislation.

This regime applies to dividends paid or credited as from 1 January 2026, irrespective of the financial year in which the profits being distributed were generated.

Key features of the new regime

• 10% withholding tax at source on dividends distributed to non-resident individuals or legal entities, in accordance with Brazilian domestic law.
• The tax is triggered at the time the dividend is paid or credited.
• The effective tax burden may be mitigated through the application of Double Taxation Treaties (DTTs), where applicable and subject to compliance with the relevant legal and documentation requirements.

Temporal application

The legislation distinguishes the tax treatment based on the timing of the distribution:

• Dividends paid or credited before 1 January 2026 remain subject to the tax treatment applicable at the time of their distribution.
• Dividends paid or credited on or after 1 January 2026 are subject to the new withholding tax regime introduced by Law No. 15,270/2025.

Practical implications

This regulatory change may have an impact, among other aspects, on:

• The effective tax cost of profit repatriation from Brazil.
• Dividend distribution policies and intragroup cash flows.
• The assessment of holding structures and substance requirements.
• The correct application and documentation of applicable double taxation treaties.

This tax change is of great importance to multinationals, as ensuring tax compliance in Brazil can become complex with these fiscal reforms. Contact our experts to learn more about our tax services for multinationals.

At Auxadi, we offer comprehensive services in accounting, tax, payroll, transfer pricing and corporate legal services to multinationals and funds. With experience since 1979 and a presence in over 50 countries, including 26 proprietary subsidiaries, our advanced technological platform, MySPV, and proven methodology enable us to guarantee efficient management in compliance with local regulations. 

Author:

Rodolfo Vinicius Kohlemann

Accounting Manager – BR