Brazil: Proposed 10% withholding tax on dividends to foreign investors
Effective as of 2026
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