Brazil: Proposed 10% withholding tax on dividends to foreign investors

Effective as of 2026

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March 20, 2025

The government on March 18, 2025, submitted to Congress draft legislation that would introduce a 10% withholding income tax on dividends paid to foreign investors effective as of 2026.

The draft legislation provides for a credit mechanism for foreign investors when the distributing Brazilian legal entity’s effective tax rate (ETR) plus 10 percentage points exceeds Brazil’s nominal corporate income tax (CIT) rate (i.e., typically 34%, though financial institutions are subject to 40% or 45%).

Read a March 2025 report prepared by the KPMG member firm in Brazil

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