Since January 1, 2026, profits and dividends paid by the same legal entity to the same individual above R$ 50,000 in a month are subject to a 10% IRRF withholding on the full amount — not only on the excess (art. 6º-A of Lei 9.250/1995, added by the Lei 15.270/2025). The same law created an annual minimum tax of up to 10% for anyone receiving more than R$ 600 thousand per year (IRPFM) and a 10% withholding on dividend remittances abroad. But the rule has cushions the news rarely explains: the transition window for profits assessed through 2025, the reducer that caps the combined burden at 34%, the exemption preserved between legal entities in Brazil — and a dispute at the STF that has already changed one of the law’s deadlines. Those who master these details pay the right tax. Those who ignore them pay twice. Profits assessed through 2025 may be distributed exempt until 2028, provided the distribution was approved in a corporate resolution by 31/12/2025 (deadline extended to 31/01/2026 by an STF injunction in ADIs 7912 and 7914).
What changed with Lei 15.270 · the 10% monthly withholding · the minimum tax (IRPFM) and its exclusions · the reducer that caps the burden at 34% · the transition window through 2028 · the trap of capitalizing profits · dividends abroad · Simples Nacional · the paying source’s obligations · what can still be planned · the dispute at the STF · frequently asked questions.
This analysis is part of the nine tax reform planning windows — the calendar of decisions the transition opens and closes, one by one, each with a deadline.
What changed with Lei 15.270/2025
The Lei 15.270/2025, enacted on November 26, 2025 and in effect since January 1, 2026, ended a 30-year cycle: since 1996, dividends distributed by companies under Lucro Real (actual profit), Presumed or Arbitrated regimes were exempt from income tax in the hands of the recipient. To fund the wider IRPF exemption bracket (zero tax up to R$ 5,000 per month), the law created three fronts of taxation on high incomes:
| Front | Who it reaches | Rate | When it applies |
|---|---|---|---|
| Monthly IRRF on dividends (art. 6º-A, Lei 9.250) | Resident individual receiving more than R$ 50 thousand/month from the same legal entity | 10% on the total | At source, on payment, credit, use or delivery |
| Annual minimum tax — IRPFM (art. 16-A, Lei 9.250) | Individual with total annual income above R$ 600 thousand | 0% to 10% (10% above R$ 1,2 milhão) | On the annual adjustment, from the 2027 return onward |
| IRRF on remittances abroad (art. 10, § 4º, Lei 9.249) | Partner or shareholder who is a non-resident, individual or legal entity | 10% flat, with no R$ 50 thousand floor | On the remittance |
Three things did not change — and they are the backbone of any planning in 2026: dividends between legal entities domiciled in Brazil remain exempt (the new art. 10 of Lei 9.249 kept the rule for a legal-entity recipient in the country); interest on net equity keeps its own framework of 15% withholding and deductibility at the company; and the exemption of profits assessed through 2025 was preserved by a transition rule with strict conditions, detailed below.
The 10% monthly withholding: how it works in practice
The criterion of art. 6º-A is objective, monthly and cumulative: all payments, credits, uses or deliveries of profits and dividends made by the same legal entity to the same individual within the month are added up. Once it passes R$ 50,000, 10% is withheld on the full amount — the law bars any deduction from the base (§ 1º) and requires the withholding to be recalculated when there is more than one payment in the month (§ 2º).
| Situation in the month | Withholding |
|---|---|
| Partner receives R$ 50,000.00 from a single company | Zero (did not exceed the limit) |
| Partner receives R$ 50,000.01 from a single company | R$ 5,000.00 (10% on the total, not on R$ 0.01) |
| Partner receives R$ 30 thousand on the 5th and R$ 30 thousand on the 25th, from the same company | R$ 6,000 (cumulative recalculation: 10% of R$ 60 thousand) |
| Partner receives R$ 40 thousand from company A and R$ 40 thousand from company B | Zero at source (the limit is per paying source) — but the R$ 80 thousand enter the annual IRPFM base |
| Holding receives dividends from the operating company (entity → entity in Brazil) | Zero (exemption kept for a legal-entity recipient in the country) |
The point that most often gets misread: the monthly withholding is an advance, not a final tax. On the annual adjustment, the withheld amount is offset against the minimum tax due (art. 16-A, § 5º) — and, if the taxpayer falls below the IRPFM floor or is entitled to the reducer, the balance flows into the regular calculation of the return and may result in a refund (§ 6º). Distributing and withholding without projecting the annual adjustment means financing the tax authority for free.
The minimum tax (IRPFM): who is in, what is out
From the 2026 calendar year onward (2027 return), an individual whose sum of all income for the year exceeds R$ 600 thousand — including exempt income and income taxed exclusively at source — becomes subject to minimum taxation. The rate rises linearly from 0% to 10% between R$ 600 thousand and R$ 1,2 milhão (formula: INCOME ÷ 60,000 − 10) and is fixed at 10% from R$ 1,2 milhão upward.
The base, however, has relevant exclusions (art. 16-A, § 1º). Left out of the calculation, among others, are: capital gains outside the stock exchange; inheritances and gifts as advances on an estate; income from savings accounts, LCI, CRI, LIG, LCA, CRA, CDCA, financial CPR and incentivized debentures; income from FIIs and Fiagros traded on the exchange with 100 or more holders; indemnities; and income exempt due to serious illness or retirement. In practice, the IRPFM’s target is dividends — they are the bulk of the base for anyone who crosses the floor.
From the assessed minimum tax, the IRPF due on the adjustment, the exclusive IRRF on income within the base, the tax paid on foreign income (Lei 14.754/2023) and the art. 16-B reducer are deducted. The design is that of a residual tax: it charges only the difference between the taxpayer’s effective burden and the minimum the law deems adequate for high incomes.
The reducer that caps the combined burden at 34%
Here is the most important — and least understood — provision of the law. If the sum of the company’s effective IRPJ/CSLL rate and the partner’s effective IRPFM rate exceeds the combined nominal rate (34% for companies in general, 40% for insurers, 45% for banks), the excess becomes a reducer of the minimum tax (art. 16-B). A Lucro Real industrial company already paying close to 34% on its book profit passes very little or no IRPFM to the partner; a company with a low effective rate — due to incentives, accelerated depreciation, offset losses or a favorable presumption — leaves room for the minimum tax to charge the difference.
Two practical conditions deserve attention: the reducer depends on financial statements prepared under corporate law (§ 4º) — informal bookkeeping or a drawer-balance sheet is expensive from now on —, and companies outside Lucro Real may opt for a simplified calculation of book profit (revenue minus payroll, inputs, rents, interest and depreciation, § 6º). The choice between tax regimes gained a new variable: it now also defines the partner’s tax. A tax-regime review that looks only at the entity is incomplete.
The transition window: profits through 2025 can be paid exempt until 2028
The transition rule preserves the exemption of profits and dividends that cumulatively meet three conditions: they relate to results assessed through the 2025 calendar year; the distribution was approved by the competent corporate body by December 31, 2025; and they are paid under the terms originally set in the approval resolution — to also stay out of the IRPFM, payment must occur in calendar years 2026, 2027 or 2028 (art. 16-A, § 1º, XII).
On the approval deadline, there is an open judicial chapter: on December 26, 2025, Justice Nunes Marques, in an injunction in ADIs 7912 and 7914 (filed by CNC and CNI), extended to January 31, 2026 the deadline for the resolution — the argument being that requiring approval of 2025 profit by 31/12/2025 is corporately impossible, since the balance sheet is closed only after the fiscal year ends. Review of the injunction was moved to the full bench by Justice Fachin’s flag and has no date yet. Companies that resolved within the window (original or extended) should treat those minutes as gold.
Three precautions to avoid losing the transition exemption:
- Documentation of the assessment: balance sheet, statement of accumulated profits and minutes with defined amounts, beneficiaries and payment schedule.
- Fidelity to the resolution: paying outside the originally approved terms (bringing forward, splitting differently, changing the beneficiary) may strip the exemption.
- 2028 horizon: reserves approved and not paid by then lose their shield against the IRPFM. The cash schedule for the next 30 months must account for this.
The trap of capitalizing profits
Capitalizing profits — adding them to share capital — was always the natural route for those who did not want to distribute. The Receita Federal (federal tax authority), in its Questions and Answers updated in December 2025 (question No. 14), made clear that this route now has a toll: incorporating profits into capital constitutes a “use” of profits — one of the scenarios of art. 6º-A. Profits assessed from 2026 onward that exceed R$ 50 thousand in a month for the same individual partner are subject to the 10% withholding at the moment of capitalization, even if not a cent leaves the company.
The same Q&A brings two counterpoints that matter for planning: the 5-year period between capitalization and return of capital (art. 63 of Decreto-Lei 1.598/1977) does not apply to this framework — keeping the profit in capital for a longer or shorter time is irrelevant for the IRRF —, and the capitalized amount may be added to the acquisition cost of the stake in the partner’s return. A subsequent return of capital is taxed under the capital gains framework (only what exceeds the cost) and, as a rule, stays out of the IRPFM base. For profits assessed through 2025, capitalization resolved by 31/12/2025 remains exempt; from 2026 onward, capitalizing old profit above the monthly limit already triggers the withholding.
Dividends abroad: 10% with no floor — and a little-known credit
For partners and shareholders abroad, the rule is harsher: 10% IRRF on any remittance of profits and dividends, with no R$ 50 thousand floor and regardless of whether the recipient is an individual or a legal entity (art. 10, § 4º, Lei 9.249). Only foreign governments with reciprocity, sovereign wealth funds and pension entities defined in regulation are left out.
The counterweight is the art. 10-A credit: if the Brazilian company’s effective IRPJ/CSLL rate plus the 10% withholding exceeds 34% (or 40%/45%), the recipient abroad may claim a credit for the difference, within 360 days of each fiscal year. Multinationals with Brazilian subsidiaries with a high effective burden should build this claim into their routine — it is recoverable money that lapses quickly. International advisory structures remain relevant for defining where the withholding hurts least.
Simples Nacional: the most unstable front
The Receita Federal — in its December 2025 Q&A and in the context of the regulation brought by IN RFB 2.299/2025 — took the position that the 10% withholding also reaches distributions from companies under the Simples Nacional regime (a simplified tax regime for small businesses) above the monthly limit. The opposing argument is strong — the Simples regime is a matter of complementary law (LC 123/2006), and Lei 15.270 is ordinary — and has already produced decisions favorable to taxpayers in the first quarter of 2026, alongside the disputes over the approval deadline. For partners of Simples companies with significant distributions, the scenario is one of opportunity with controlled risk: the dispute is legal, documentary and low-cost to enter via a writ of mandamus.
The paying source’s obligations: the operational side no one can get wrong
The responsibility to withhold, declare and pay rests with the legal entity that pays — and the flow, according to the Receita Federal guidance, runs entirely within the digital ecosystem:
| Stage | Instrument | Detail |
|---|---|---|
| Monthly bookkeeping | EFD-Reinf, event R-4010 | Gross income, taxable income (total distributed when > R$ 50 thousand) and 10% IRRF |
| Declaration | DCTFWeb | Automatic linkage to codes 1841-01 (residents) and 1841-02 (non-residents) |
| Payment — residents | Numbered DARF (Sicalc or DCTFWeb) | Due on the last business day of the 2nd ten-day period of the month following the triggering event |
| Payment — non-residents | Numbered DARF (Sicalc) | Due on the same day as the triggering event |
Getting the event, the code or the ten-day period wrong generates a penalty and, worse, opens a mismatch between Reinf, DCTFWeb and the partner’s return — exactly the kind of cross-check the Receita has automated. The tax governance of profit distribution has ceased to be a single accounting entry and become a monthly compliance routine.
What can still be planned in 2026
Lei 15.270 did not end the planning of corporate compensation — it swapped the variables. The optimal design is now individual, by partner and by company, and combines six levers:
1. Distribution calendar. The R$ 50 thousand limit is monthly and per paying source. A regular distribution policy, set in minutes and compatible with cash flow, beats a distribution concentrated in a single month. Mind the line that separates lawful tax avoidance from artificial fragmentation: the calendar must have business rationale, not just a tax one — and the annual IRPFM exists precisely to reach those who merely “spread it monthly”.
2. Mix of dividends + JCP + pro-labore. With dividends taxed at up to 10%, interest on net equity (15% withholding, but deductible from the company’s IRPJ/CSLL base) regains ground in the comparison, especially under Lucro Real. The break-even point has shifted and must be recalculated company by company.
3. Managing the entity’s effective rate. The closer the company’s effective burden is to 34%, the lower the partner’s IRPFM — the art. 16-B reducer bridges the gap. Benefits that lower the effective rate (incentives, exclusions, presumptions) now carry a knock-on cost to the partner that must enter the consolidated entity + individual calculation.
4. Holdings and layered structures. The entity → entity exemption in Brazil was kept: profits can move up from the operating company to the holding without withholding, and taxation only occurs when (and if) they reach the individual. This turns the holding into an instrument of deferral and timing management — reinvestment, acquisitions and succession gain efficiency. Corporate restructuring should precede large distributions, never the other way around.
5. Executing the 2026-2028 transition. Those who approved distributions by 31/12/2025 (or 31/01/2026, under the injunction) have an exempt stock to manage: a payment schedule faithful to the minutes, programmed cash and no changing the terms along the way.
6. Selective litigation. A corporately impossible approval deadline, Simples Nacional under ordinary law and the capitalization of old profits are the three fronts with the strongest grounds today. The decision to litigate must weigh the amount involved, the risk profile and the stage of the ADIs at the STF.
“The right question in 2026 is not ‘how do I avoid the 10%’ — it is ‘which combination of calendar, instrument and structure delivers the lowest combined entity + individual burden within the law’. That calculation has six variables and changes with every balance sheet.”
TaxUp Team · Tax Practice
How TaxUp works
TaxUp’s corporate-compensation diagnosis models the combined company + partners burden across compared scenarios: current policy versus optimized calendar, mix with JCP, interposing a holding and use of the 34% reducer — with calculation memos, the legal basis of each lever and a corporate and accounting implementation plan. For groups with accumulated profits approved within the transition window, the team structures the 2026-2028 schedule and the documentary trail that sustains the exemption in a possible audit. And where the legal thesis pays off, the litigation team takes over the dispute.
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Frequently asked questions
Do dividends above R$ 50 thousand pay 10% only on the amount that exceeds the limit?
No. Once the monthly limit of R$ 50 thousand per individual and per paying source is exceeded, the 10% withholding applies to the total amount distributed in the month, with no deduction whatsoever from the base (art. 6º-A, § 1º, of Lei 9.250/1995).
Can profits accumulated through 2025 still be distributed tax-free?
Yes, provided the distribution was approved by the corporate body by 31/12/2025 (deadline extended to 31/01/2026 by an STF injunction in ADIs 7912 and 7914, pending review) and payment occurs under the terms of the approval resolution — by 2028 to also stay out of the minimum tax.
Does receiving R$ 45 thousand from two different companies in the same month generate withholding?
At source, no — the R$ 50 thousand limit is per paying legal entity. But the R$ 90 thousand make up the annual sum of income: once it passes R$ 600 thousand in the year, it enters the minimum tax (IRPFM) base on the adjustment.
Is the 10% withholding on dividends final?
No. It is an advance on the annual minimum tax. On the adjustment return, the withheld amount is deducted from the IRPFM due; if the taxpayer falls below the floor or has a sufficient reducer, the balance may be refunded.
Does capitalizing profits instead of distributing them avoid the tax?
For profits assessed from 2026 onward, no: the Receita treats the incorporation into capital as a “use” of profits, subject to the 10% withholding at the moment of capitalization when it exceeds R$ 50 thousand in the month per partner. The capitalized amount, however, is added to the acquisition cost of the stake, and a future return is taxed as a capital gain.
Does a holding still make sense after Lei 15.270?
Yes — perhaps more than before. Dividends between legal entities in Brazil remain exempt, so the holding preserves the deferral: the tax only arises when the profit reaches the individual. The design must have documented substance and business purpose.
How are dividends remitted abroad treated?
They are subject to a 10% IRRF with no value floor, for any non-resident recipient. If the Brazilian company’s effective burden plus the 10% exceeds 34%, the recipient may claim a credit for the difference within 360 days of each fiscal year (art. 10-A of Lei 9.249/1995).
Do Simples Nacional companies also withhold the 10%?
According to the Receita Federal (Questions and Answers of December 2025, in the context of IN RFB 2.299/2025), yes, above the monthly limit. There is, however, solid ground to dispute it in court — the Simples regime is governed by complementary law — and decisions favorable to taxpayers have already been issued in 2026.
Sources: Lei 15.270, of November 26, 2025 (Planalto); Lei 9.249/1995 and Lei 9.250/1995 (consolidated wording); Receita Federal — procedures for collecting IRRF on profits and dividends (Dec/2025); Receita Federal — Questions and Answers on the taxation of high incomes, version 19/12/2025; IN RFB nº 2.299, of December 17, 2025; STF — injunction in ADIs 7912 and 7914 (rapporteur Justice Nunes Marques, 26/12/2025), review pending before the full bench; ConJur — first decisions against Lei 15.270 (Apr/2026). Informational content; not legal advice.
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