Who this guide is for
This guide is for foreign companies that own, or plan to acquire, a stake in a Brazilian company. The rules on payments to non-residents also matter to individual investors who live outside Brazil.
The Brazilian company is called a subsidiary when it is controlled by the foreign company, the parent. Dividends are the profits distributed to partners or shareholders as a return on the investment.
To plan this return, you need to know the profit available, the Brazilian tax on the distribution and how the receipt is treated in the parent's country.
Short answer. Since January 2026, dividends paid to partners or shareholders abroad are subject, as a rule, to 10% withholding income tax, whatever the amount.
The Brazilian company withholds the tax and pays it to the Receita Federal. The parent receives the net amount.
There are exceptions for certain beneficiaries and a transition rule for profits earned up to 2025. A tax treaty can also influence the treatment of the operation.
The tax is due on the same day as the taxable event, which can happen before the bank transfer. So the distribution should be organised with the accounting before the acts and payments are carried out. See Law 15,270/2025.
General information as of October 2026. Confirm your case with your advisors.
The rule since 2026
Law 15,270/2025 introduced withholding on profits and dividends sent abroad.
The tax can arise when the income is paid, credited, delivered, used or remitted. This means the analysis is not limited to the day the money leaves the Brazilian bank account.
Who receives: the partner or shareholder resident or domiciled abroad, individual or company.
Who meets the obligation in Brazil: the Brazilian company that distributes the profit. It calculates, withholds, files and pays the tax.
What the amount rule is: for non-residents, the withholding does not depend on exceeding R$ 50,000. That threshold belongs to the specific rule that applies to individuals resident in Brazil.
The Receita Federal's guidance also indicates the 10% rate (Law 15,270/2025) for beneficiaries in countries that do not tax income or tax it at a maximum rate below 17% (see the Receita Federal questions and answers).
How much does the parent receive?
Consider a distribution of R$ 100,000 in gross dividends, subject to the general rule, with no exemption or different treatment that applies:
| Item | Amount |
|---|---|
| Gross dividends attributed to the parent | R$ 100,000 |
| Tax withheld in Brazil: 10% | R$ 10,000 |
| Net amount after the Brazilian withholding | R$ 90,000 |
The example does not include bank costs, currency conversion or any taxation abroad.
The R$ 100,000 is profit already available for distribution. The taxes on the Brazilian company's operation are an earlier stage and are not included in the R$ 10,000 of the example.
To know the final return, the parent must confirm in its own country whether the receipt will be taxed and whether it can use the tax paid in Brazil.
Profits earned up to 2025
Having profit accumulated from earlier years does not, by itself, guarantee the absence of withholding.
The transition rule requires checking all of these together:
- Whether the profit corresponds to results earned up to calendar year 2025.
- Whether the distribution was approved by December 31, 2025 by the competent body.
- Whether the amount is payable under civil or corporate law.
- Whether the payment follows the terms originally approved.
The Receita also states that the payment, credit, use or delivery of these amounts must take place by 2028.
The approval must be valid under the articles of association, the bylaws and the applicable law. In a corporation (S.A.), a mere proposal by the management does not replace the resolution of the competent body.
The approved amounts must be recorded as an obligation of the company, according to the payment schedule. The effects of this record on the base for interest on equity must also be considered.
In practice: before distributing an old profit, you need to check the accounting, the 2025 resolution and the approved schedule. Later changes can compromise the framing in the transition.
Who can be free of the withholding?
The law provides for the charge to be removed for certain beneficiaries:
| Beneficiary | Main condition |
|---|---|
| Foreign government | Reciprocity of treatment for the income of the Brazilian government in that country. |
| Sovereign fund | Falling within the applicable legal definition. |
| Foreign pension entity | Meeting the conditions required for entities whose main activity is managing pension benefits. |
According to the Receita's guidance, this treatment does not depend on the year in which the profit was earned.
It can also reach certain vehicles wholly held, directly or indirectly, by these beneficiaries, subject to the applicable conditions.
An ordinary foreign company does not fall within these exceptions just because it is a holding or an investment vehicle. You need to identify the beneficiaries, prove the structure and check the requirements.
Does reinvesting the profit avoid the tax?
It depends on how the reinvestment is carried out.
Keeping the profit in the company, without attributing it to the partner by an act that triggers taxation, is different from incorporating it into share capital.
Capitalising profits means turning profits into the company's capital, formalising an increase in the partners' stake. Although there may be no transfer of money abroad, the Receita treats this operation as a use of the profit.
For this reason, since 2026, capitalisation is, as a rule, subject to the 10% withholding on the portion attributed to the non-resident.
The guidance provides an exception for profits earned up to 2025 whose capitalisation was decided and approved by December 31 of that year.
The incorporated amount can be part of the cost of acquisition of the stake, according to the applicable treatment. A future return of capital requires a separate analysis: there can be a capital gain if the amount received exceeds that cost.
Keeping the capitalised amount for five years does not, by itself, remove the taxation that the Receita indicates for capitalisation.
When and how is the tax paid?
| Item | Procedure |
|---|---|
| Responsible | The Brazilian company that distributes the dividends. |
| Due date for non-residents | The same day as the taxable event. |
| Payment document | Darf, the federal payment slip, issued in Sicalc according to the guidance for daily due dates. |
| Identification of the tax | Code 1841, with sub-code 1841-02 for non-residents. |
| Reporting | Information in the EFD-Reinf and integration with the DCTFWeb. |
The EFD-Reinf is the system used to report income and withholdings to the Receita. The DCTFWeb gathers the information on the tax debts declared.
The monthly calendar of these declarations does not postpone the daily due date of the tax owed when distributing dividends to non-residents (see the Receita Federal guidance of August 2026).
Before carrying out the distribution, the company needs the calculation, the documents and the funds for the payment. Waiting for the bank remittance can be too late if another taxable event has already occurred.
What to prepare for the transfer
The documentation must show where the profit comes from, who is entitled to receive it and which tax treatment was adopted.
Depending on the case, the preparation involves:
- Accounting that supports the available profit.
- The corporate resolution on the distribution.
- Identification and bank details of the beneficiary.
- The calculation and proof of the tax, when due.
- Documents requested by the institution that will carry out the exchange.
- A check of the obligations before the Central Bank.
Information on foreign investment must be provided or updated when the operation is subject to the Central Bank rules. The requirements vary with the movement and the applicable criteria; do not assume an identical mandatory registration for every remittance (see the Central Bank service on gov.br).
Can a treaty reduce the 10%?
It can influence the result, but a reduction should not be assumed.
You need to examine the treaty between Brazil and the parent's country of tax residence, the article on dividends and the conditions for applying it.
Some provisions distinguish beneficiaries by the percentage held or other characteristics. A ceiling in the treaty can also be equal to or higher than the domestic rate, producing no reduction on this payment.
Separately, the parent's advisors must confirm how the income will be treated abroad and whether there will be a credit for the Brazilian tax.
See our guide on Brazil's tax treaties to understand this analysis.
Dividends or other forms of payment?
Dividends reward the investment in the company's profits. Services, licences, loan interest and capital returns have their own purposes and different treatments.
The comparison must consider the real operation, the contracts, all the taxes and the obligations involved. It is not enough to change the name of the transfer to change its taxation. Our guide on sending money out of Brazil compares the routes.
The remittance calculator lets you compare scenarios with your numbers. The result depends on the assumptions entered; the application of an exemption or of a treaty must be confirmed before payment.
The simulation result is free to see; the PDF report is available to subscribers.
Legal basis and sources
Rules and guidance used in this guide, checked in October 2026:
- Law 15,270/2025, which introduced withholding on profits and dividends paid to non-residents.
- Receita Federal, questions and answers on profits and dividends, December 19, 2025: rate, transition rule, exemptions, capitalisation and revenue code.
- Receita Federal guidance on the payment of the withholding, August 6, 2026: due date for non-residents, code 1841-02, EFD-Reinf and DCTFWeb.
- Provisions cited by the Receita in those answers: Law 9,249/1995, article 10, paragraph 4; Law 11,196/2005, article 70, item I; Law 11,312/2006, article 3, paragraph 5 (sovereign funds); Decree-Law 1,598/1977, article 63.
- Central Bank of Brazil, SCE-IED service and BCB Resolution 278/2022, on foreign direct investment reporting.
How we work
Move Advisory is the consulting area of Move Online, an accounting firm in São Paulo founded in 2017.
In the diagnosis, we analyse the corporate structure, the origin of the profits, the resolutions and the planned calendar. We check the Brazilian withholding and any applicable treaty.
In the operation, we handle the accounting, the calculation and the declarations under our responsibility, and we check the obligations that relate to the foreign investment.
The treatment in the parent's country must be confirmed with your local advisors to complete the assessment of the return. See the services page.