On November 26, 2025, Brazilian Federal Law No. 15,270/2025 was enacted, introducing a new framework for the taxation of dividends, which will become effective as of January 1, 2026. As from such date, dividend payments may be subject to withholding income tax at a rate of 10%, as well as to the application of the so-called minimum taxation on high incomes.
The law itself, however, established a relevant transitional regime, pursuant to which profit and dividends distributions will not be subject to the new taxation rules if they relate to earnings accrued up to the 2025 calendar year, provided that the distribution is duly approved by December 31, 2025, and that the amounts are legally payable under corporate law, observing the deadlines and conditions defined in the approval act. In such cases, payment may even occur in subsequent years, without prejudice to the application of the transitional regime, as long as the terms originally approved are duly observed.
In light of the above, companies intending to distribute profits accrued up to December 31, 2025 without being subject to the new dividend taxation regime must approve such distributions in 2025, through a shareholders’ meeting or a quotaholders’ meeting, as applicable depending on the company’s corporate type. It is also important to observe the guidelines for maintaining confidentiality regarding sensitive data related to shareholders or quotaholders, as well as the amounts to be declared.
