The IRRF on dividends takes effect in 2026, and the date of the minutes approving the distribution determines who remains exempt.
Law No. 15,270/2025 created the IRRF (withholding income tax) on dividends paid to resident individuals as from January 2026. In practice, the company withholds 10% when it pays more than BRL 50,000 to the same shareholder in a single month. Profits from 2025 or earlier fall outside the rule, provided that the shareholders approved the distribution by 31 December 2025.
How the IRRF on dividends works in monthly withholding
The rule is set out in article 6-A of Law No. 9,250/1995, as worded by the new statute. The threshold applies per paying company and per shareholder. Accordingly, two payments made in the same month are added together. If the total exceeds BRL 50,000, the 10% applies to the entire amount, and not only to the excess. In addition, the law prohibits any deduction from the calculation basis.
There is also the minimum taxation of high incomes. It reaches those who receive more than BRL 600,000 in the year, as from calendar year 2026. The rate reaches 10%, and tax already withheld at source is treated as a deduction. Dividends remitted abroad, on the other hand, are subject to 10% withholding, under article 10, paragraph 4, of Law No. 9,249/1995.
Does approval of the accounts by 31 December 2025 protect the dividend?
The exemption depends on three cumulative conditions. First, the profit must have been determined up to 2025. Second, the competent corporate body must have approved the distribution by 31 December 2025. Lastly, payment must follow the terms set out in the approval resolution.
For this reason, the date of the minutes matters as much as the balance sheet. Those who approved the 2025 accounts after that date will, as a rule, subject the distribution to withholding on dividends. There is litigation over this cut-off date, including before the STF (Federal Supreme Court), and decisions of the Federal Courts have already limited the withholding in specific cases. However, these outcomes may change before the higher courts.
Our understanding is that clear minutes, stating the date and the agreed form of payment, constitute the central evidence of the exemption.
Payment schedule and minutes: what to review now
First, the company should list the shareholders who receive more than BRL 50,000 per month. Next, it must check whether there are minutes dated before 2026 supporting each distribution. It is also advisable to assess cash flow, since the withholding reduces the net amount received by the shareholder.
The following step is to cross-check, shareholder by shareholder, the minutes against the payment projections, before each 2026 distribution.
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