Brazil Increases Income Tax Exemption, Taxes Dividends, Imposes Minimum Tax on High-Income Individuals
President Luiz Inácio Lula da Silva has sanctioned Law 15,270 introducing major changes to the taxation of individual income in Brazil. Law 15,270, which resulted from Bill 1,087/2025, was sanctioned without any vetoes and reflects the version approved by the Senate (for details, seeSenate Approves Bill to Increase Income Tax Exemption, Tax Dividends and Impose Minimum Tax on High-Income Individuals (13 November 2025)).
Law 15,270 introduces, among other amendments, the following changes:
- an increase in the exemption threshold for individual income tax: monthly earnings of up to BRL 5,000 are exempt from individual income tax. Income between BRL 5,000 and BRL 7,350 will benefit from a gradual reduction of taxation. For income over BRL 7,350, the current standard progressive table continues to apply;
- dividend taxation:
- introducing a 10% individual income tax on monthly dividends exceeding BRL 50,000 paid by a single company to a resident individual; and
- applying a 10% withholding income tax to dividends paid by Brazilian legal entities to non-residents (both corporate and individual beneficiaries);
- a tax on individuals with annual income exceeding BRL 600,000 (Imposto de Renda das Pessoas Físicas Mínimo, IRPFM); and
- an update of the simplified deduction: effective tax year 2026, the simplified deduction will be limited to BRL 17,640 (article 10, IX and X of Law 9,250/1995).
Law 15,270 was published in the Official Gazette on 27 November 2025 and is effective as of 1 January 2026.
These new rules will still require additional regulation from the Federal Revenue Service to specify the details of implementation and establish compliance procedures.
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