Brazil's Federal Revenue Service has issued guidance on the withholding of income tax on profits and dividends under Law No. 15,270/2025, outlining reporting obligations, payment procedures, tax codes, and filing deadlines for paying entities.
Brazil’s tax authority, the Federal Revenue Service (RFB), announced that it enacted Law No. 15,270 of 26 November 2025 on 6 August 2026, which introduced significant changes to income taxation, including the withholding of Income Tax at Source (IRRF) on profits and dividends distributed by legal entities to individuals.
The new rule applies to income paid to both residents and non-residents in Brazil and has been in effect since January 2026.
How will the reporting and declaration be handled?
The responsibility for recording, reporting, and paying the withholding income tax (IRRF) rests with the paying legal entity, which must report the payments made monthly through the Digital Tax Records of Withholdings and Other Information (EFD-Reinf), in accordance with the guidance below and other instructions contained in the EFD-Reinf User Manual.
Event R-4010 – Payment to individual beneficiary
- Gross income value (vlrRendBruto): Total amount paid, credited, or delivered to the individual, including exempt or non-taxable amounts.
- Taxable income value (vlrRendTrib): Amount distributed exceeding BRL 50,000 to the same individual in a single month. The taxable income corresponds to the total amount distributed.
- Withholding income tax amount (vlrIR): Calculated by applying the 10% tax rate to the taxable income.
The calculated amounts will be automatically linked to the relevant revenue codes and transmitted to DCTFWeb for reporting together with the legal entity’s other taxes.
Tax codes
- 1841-01: Withholding income tax for residents.
- 1841-02: Withholding income tax for non-residents.
Withholding of income tax
The tax must be paid by the legal entity using a numbered DARF issued through the Sicalc system or DCTFWeb.
- Withholding income tax for residents: Due on the last business day of the second ten-day period of the month following the taxable event (payment, credit, or delivery).
- Withholding income tax for non-residents: Due on the same day the taxable event occurs (daily due date). The corresponding DARF must be issued through Sicalc, with the taxable event date matching the date reported in EFD-Reinf and DCTFWeb.
Other changes under Law No. 15,270
In addition to the taxation of profits and dividends, the law also:
- Reduced income tax on both the monthly and annual calculation bases.
- Established a minimum tax rate for high-income individuals.
The Brazilian Federal Revenue Service has also published a Frequently Asked Questions (FAQs) document addressing the main questions raised by taxpayers.
