Brazil dividends to international investors: why 31 December 2025 is the “last call” to reduce withholding risk under Law 15.270/2025

If you are an international investor (a non-resident shareholder or foreign fund) receiving dividends from a Brazilian company, a major change is imminent: starting January 2026, dividends paid or otherwise made available to non-residents become subject to Brazilian withholding income tax (IRRF).

The practical risk is straightforward: a dividend remittance abroad in 2026 can trigger withholding, even if the underlying earnings relate to 2025, unless the company qualifies under the transition rule and can prove it with proper corporate documentation.

This is why, for non-residents, the urgency is even higher: from 2026 onward, the withholding rule applies broadly, and the Brazilian tax authorities expressly indicate that it applies regardless of amount in non-resident cases.

1) What changes in 2026: 10% IRRF on dividends paid to non-residents

Brazil’s Federal Revenue Service (Receita Federal) states that, following Law No. 15.270/2025, dividends distributed by Brazilian companies to non-residents will be taxable from January 2026, with IRRF withheld by the Brazilian taxpayer.

Rate: the Q&A guidance confirms 10% IRRF applies to dividends “paid, credited, delivered, employed or remitted” abroad.

No minimum threshold for non-residents: Receita Federal also clarifies that for payments to non-residents, withholding applies regardless of the dividend amount.

2) The transition rule: how 2025 earnings can remain outside withholding—if you meet strict conditions

The law and Receita Federal guidance describe a transitional safe harbor for dividends linked to earnings determined up to calendar year 2025, provided corporate and timing requirements are met.

In summary, no IRRF withholding applies where dividends are:

1. Related to results/earnings ascertained up to calendar year 2025;

2. Their distribution is approved by 31 December 2025; and

3. They are payable (exigible) under Brazilian civil/corporate law, and the payment/credit/delivery occurs exactly under the terms originally set out in the approving resolution.
   

Timing note (administrative guidance): Receita Federal further indicates the payment/credit/delivery should occur through calendar year 2028 for the transition to apply as described in the Q&A.

3) The biggest pitfall for foreign investors: paying in 2026 without a valid 2025 shareholders’ resolution

For international investors, the most common (and expensive) mistake is assuming that “these are 2025 profits, so paying in 2026 should be fine.”

Under the transition rule, that is not enough. Receita Federal is explicit that the approval must be made by the competent corporate body by 31 December 2025, and that a management proposal does not replace a proper corporate decision by the required deadline.

If the company fails to approve and properly document the distribution in time, a remittance in 2026 is far more likely to be treated under the new withholding regime.

4) Corporate documentation: why filing the minutes can be decisive (Junta Comercial / Registry Office)

The transition rule is not only a tax issue—it is also a corporate governance and evidence issue. Your strongest position is built on:

• a duly convened and valid shareholders’/quotaholders’ resolution approving the distribution by 31 December 2025;

• clear minutes setting out amount (or objective formula), entitlement, and payment schedule; and

• filing/registration of the minutes with the Junta Comercial (or the competent registry office, depending on the entity).
  

Official communications from a Board of Trade (Junta Comercial) have emphasized that companies should approve and register minutes in 2025 to preserve the transition treatment for distributions made between 2026 and 2028.

5) Additional carve-outs for certain foreign entities

Receita Federal also mentions cases in which withholding may be set aside for distributions to specific foreign recipients (subject to conditions), such as foreign governments (with reciprocity), sovereign funds, and certain foreign entities whose main activity is the administration of pension/retirement benefits.

These situations are highly fact-specific and should be reviewed case-by-case.

FAQ

Will Brazil withhold tax on dividends paid to non-residents from 2026? Yes. Receita Federal states that dividends distributed to non-residents become taxable from January 2026 and must be withheld by the Brazilian payer.

Is there a minimum threshold for non-residents?

Receita Federal indicates withholding applies to non-residents regardless of amount.

How can 2025 earnings still be distributed in 2026 without withholding? Only if the distribution is approved by 31 December 2025, is payable under corporate law, and is paid/credited under the original approved terms (with administrative guidance pointing to execution through 2028).

Conclusion: last days to secure the 2025 transition position

For international investors, the message is clear: any dividend remittance starting in 2026 is within the withholding tax perimeter, unless the company can demonstrate it falls under the transition rule with proper 2025 corporate approvals and robust filings.

If you have questions about how Law 15.270/2025 applies to your structure—or you want to ensure your company’s approvals, minutes, and filings are aligned with the transition requirements—please contact our tax specialist, Iure Pontes Vieira : iurevieira@pontesvieira.com.br