Law No. 15,270/2025: practical impacts on dividends and minimum taxation of high-income individuals

Law No. 15,270/2025, enacted on 26 November 2025 and published in the Federal Official Gazette (DOU) of 27 November 2025, amends Laws No. 9,250/1995 and 9,249/1995 to redefine relevant aspects of the Individual Income Tax (IRPF), along two core pillars: (i) creation of a regime of minimum annual taxation for high-income individuals and (ii) introduction of withholding income tax on profits and dividends in specific situations. Although already in force since its publication, its tax effects will apply as from 1 January 2026.

Minimum annual taxation applies to individuals whose total income in the calendar year exceeds BRL 600,000.00, subjecting them to a progressive rate of up to 10% when such total reaches BRL 1,200,000.00. The expression “total income” means that, regardless of whether profit and dividend distributions are made by different companies to the same individual and even if there has been no withholding at source on a monthly basis, it will be mandatory, upon filing the annual income tax return, to calculate and pay the minimum tax corresponding to the amount exceeding BRL 600,000.00, according to the applicable progressive rate.

On the topic of dividends, the statute preserves the general non-taxation rule for companies domiciled in Brazil but starts taxing two relevant situations. The first is withholding of 10% when the same legal entity pays/credits/delivers profits and dividends to the same individual resident in Brazil in an amount exceeding BRL 50,000.00 in a given month, with a recalculation rule where multiple payments occur in the same period. The second is withholding taxation of 10% at source on dividends paid, credited or remitted abroad, applicable to both individual and corporate beneficiaries.

Transitional rule (critical point of attention): withholding does not apply to profits and dividends relating to results accrued up to 2025, provided that the distribution has been approved by 31 December 2025, is due and payable, and payment/crediting occurs between 2026 and 2028, pursuant to the corresponding corporate act of approval.