Brazil Proposes 10% Tax on Dividends Sent Abroad
The Brazilian government recently proposed an Income Tax reform that includes a 10% tax on dividends distributed abroad. This measure aims to offset the expansion of the income tax exemption bracket for monthly earnings of up to R$ 5,000, scheduled to take effect in 2026.
The 10% rate will apply to all dividend remittances sent abroad, regardless of the amount or type of recipient, whether an individual or a legal entity. This strategy seeks to prevent foreign investors from shifting their tax residency to avoid the tax.
For example, a company that distributes R$ 50,000 per month in dividends to a foreign recipient would face a R$ 5,000 withholding tax under the new rule.
It is estimated that this measure will generate an additional R$ 8.9 billion per year, helping to neutralize the fiscal impact of the increased income tax exemption.
Experts suggest that the new rule may reduce Brazil's attractiveness to foreign capital, putting pressure on prices and increasing short-term volatility. Depending on how investors react, this move could influence the flow of money into and out of the country, requiring close monitoring by the government and the Central Bank.
The proposal is still under review by the National Congress and may undergo changes during the legislative process.
Cost-Sharing Agreements vs. Service Provision – Brazilian Federal Revenue’s Interpretation
Published on March 20, 2025, Cosit Consultation Solution No. 39 reaffirms the Brazilian Federal Revenue Service's recent understanding that cost-sharing agreements are to be reclassified as service provision, making them subject to taxation.
In the case reviewed, the central company (head office) located abroad covered expenses related to salaries of accountants, lawyers, and administrative staff, benefiting both the economic group and the head office itself.
Even though these were internal costs and support activities, the ruling classified them as technical and administrative assistance services, subjecting them to Withholding Income Tax (IRRF), Contribution for Intervention in the Economic Domain (CIDE), and PIS/Cofins-Importation.
Brazilian Federal Revenue Service publishes Consultation Solution regarding the treatment of software in the Brazil-France treaty
The Consultation Solution (SC) 54/2025, published on March 25th, 2025, deals with the taxation by WHT (IRRF) of amounts paid by a Brazilian company to the parent company domiciled in France as a result of a software marketing license.
According to the taxpayer, the Brazil-France Double Tax Treaty would establish a specific concept of royalties that is slightly different from that dealt with in Brazilian legislation, which would exclude from the concept of royalties the payment of amounts arising from the commercial exploitation of software.
In line with this thinking, the taxpayer mentioned that the Brazil-France DTT would not establish a specific provision to deal with the taxation of amounts remitted abroad related to the software marketing license, therefore falling under the general rule (of profits), a hypothesis that would not require IRRF.
When analyzing the case, the Brazilian Federal Revenue Service understood that the payments, including those related to the marketing license, fall under the concept of royalties
In this case, the Federal Revenue Service found that the licensed distribution right includes the granting of the right to use, in addition to the right to sublicense. It also clarified that “sublicensing allows the supplier to access new customers. This type of license does not transfer the intellectual property of the software, but grants the right to use the sublicensee so that it can use the software under specific conditions defined by the licensor.”
Considering this, the Federal Revenue Service understood that article XII, item 2, item “a” of the Brazil-France DTT should apply, which establishes a tax limit of 10% on the gross amount of royalties paid, whether for the use or for the granting of the use of a copyright, stating that licensing for commercial distribution, at least in this specific case, would also constitute a granting of use for tax legislation.
Brazil Strengthens Its Global Role in Energy Innovation and Sustainability at CERAWeek 2025
From March 10 to 14, 2025, CERAWeek brought together top executives, policymakers, and innovative companies from the global energy sector in Houston, Texas, to discuss the evolution of the energy industry. With a strong focus on decarbonization, energy security, and technological advancements, the conference highlighted key trends in renewable energy, hydrogen, carbon capture & storage, and AI-based energy solutions.
The Brazilian delegation, led by the Brazilian Trade and Investment Promotion Agency (ApexBrasil) with support from the Investment Partnership Program (PPI) and the Brazilian Institute of Oil and Gas (IBP), included government representatives, energy companies, and startups. They presented cutting-edge solutions in clean energy and technology applied to decarbonization. The National Agency of Petroleum, Natural Gas, and Biofuels (ANP) was part of the Brazilian delegation to promote upcoming exploration and production auctions this year.
Through expert panels, networking sessions, and business meetings, Brazil showcased its investment opportunities, strategic energy policies, and pioneering projects in areas such as biofuels, green hydrogen, and wind/solar energy.
The event marked the launch of "Invest in Brasil Net-Zero Solutions," a program that supports international companies entering the Brazilian market with solutions to reduce their carbon footprint.
Camex Approves Import Tax Exemption for Nine Food Products
The Brazilian Foreign Trade Chamber (Camex) has officially approved a measure to curb food prices, detailing the items with a zero tariff. The list, which includes Common Nomenclature of Mercosur (NCM) codes, covers nine food products divided into ten NCM categories.
Here is the final list of food products that will have their Import Tax reduced to zero:
For sardines, the zero-tax rate will only apply to an import quota of 7,500 tons. Additionally, as announced last week, the import quota for palm oil has been increased from 60,000 to 150,000 tons for 12 months, maintaining a zero Import Tax rate.
Tax Reform and the Brazilian Authorized Economic Operator Program – OEA
Celebrating its 10th anniversary in December 2024, the Authorized Economic Operator (OEA) Program is a strategic partner of the Brazilian Federal Revenue Service. It certifies foreign trade chain participants who meet the requirements as low-risk, reliable operators, granting them benefits from Brazilian Customs, including greater agility and predictability in international trade flows.
The recently approved Tax Reform in Brazil aims to simplify the tax system by replacing several taxes with a Dual VAT model, IBS, and CBS.
In the context of the OEA, the Tax Reform allows certified OEA participants to defer payment of IBS and CBS on imports to a later date, after customs clearance.
To establish a legal framework for the OEA Program, Bill No. 15 of 2024 also seeks to align OEA regulations with the Tax Reform, including the option for tax deferral, allowing OEA-certified taxpayers to pay import taxes by the 20th day of the month following the customs declaration registration.
Bill Proposes Tax on Gambling to Match Cigarette Taxation
Complementary Bill No. 209 of 2024 proposes that taxes on gambling in Brazil should match those applied to cigarette sales.
Cigarette taxation in Brazil involves a fixed tax of R$ 2.25 per pack, along with a 66.7% sales price tax rate.
The bill, currently under review in the Chamber of Deputies, proposes allocating part of the revenue from gambling taxes to public awareness and gambling addiction prevention campaigns, to be broadcast across all available media.
The proposal will be analyzed conclusively by the Finance and Taxation Committee and the Constitution, Justice, and Citizenship Committee before proceeding to the Plenary. For it to become law, both the Chamber and the Senate must approve the bill.
Migration Schedule for Imports to the Single Portal - March 2025 Update
On March 6, 2025, the Foreign Trade Secretariat (Secex) and the Special Secretariat of the Federal Revenue of Brazil (RFB) announced the mandatory import schedule through the Single Foreign Trade Portal and the completion of the second stage of the adoption schedule for regulatory agencies under the New Import Process (NPI).
Starting April 1, 2025, imports via the maritime mode subject to regulatory approval under the RECOF, Repetro, and Temporary Admission regimes must be processed through the Duimp system.
Additionally, the agencies informed that all imports via maritime and air transport under the regulation of the National Agency of Petroleum, Natural Gas, and Biofuels (ANP), the Ministry of Science, Technology, and Innovation (MCTI), the Brazilian Post and Telegraph Company (ECT-Correios), the National Mining Agency (ANM), and the Ministry of Defense can already be processed directly in the Single Foreign Trade Portal. However, importers still have the option to conduct these operations through the Siscomex LI/DI system.
Ninety-Day Rule Does Not Apply to Merchant Marine Renewal Fee (AFRMM) Additional Tax
The Brazilian Supreme Federal Court (STF) reaffirmed that the rule requiring taxes to be collected only after 90 days from the law’s enactment (the ninety-day rule) or the next fiscal year does not apply to the Merchant Marine Renewal Fee (AFRMM) additional tax rates maintained by a 2023 decree.
The unanimous decision came from a Virtual Plenary session ruling on Extraordinary Appeal with Appeal (ARE) No. 1527985.
The Court had previously ruled on this matter, but it has now been decided under the general repercussion system (Topic 1,368), meaning the ruling applies to all similar ongoing cases.
The general repercussion thesis established was:
"The full AFRMM rates, from the revocation of Decree No. 11,321/2022 by Decree No. 11,374/2023, are not subject to tax anteriority (fiscal year and ninety-day rules)."
ICMS (VAT) Exemption Covers All Stages of the Export Process, Confirms STJ
The ICMS (Value Added Tax) exemption provided by law applies to all stages of the export process, including interstate transportation.
This ruling came from the Second Chamber of the Superior Court of Justice (STJ), which dismissed a special appeal from the state of São Paulo. The state tax authority sought to overturn established jurisprudence, demanding ICMS payments on intermunicipal transportation of goods from a sugar and ethanol company.
Minister Francisco Falcão, the rapporteur, upheld the prevailing jurisprudence, concluding that "ICMS exemption aims to prevent taxation from burdening export operations, ensuring the competitiveness of Brazilian products in international markets."
The STJ has consistently ruled on this matter, including in Summary No. 649, which states:
"ICMS does not apply to interstate transportation services for goods destined for export."
STJ Decides That Intercurrent Prescription Applies to Customs Violations
Minister Paulo Sérgio Domingues presented the thesis that "intercurrent prescription, provided for in Article 1, §1 of Law 9,873/1999, applies when the administrative process of customs investigations, of a non-tax nature, remains inactive for more than three years."
Thus, the First Section of the Superior Court of Justice (STJ) unanimously ruled that intercurrent prescription—meaning the filing of a case after more than three years of inactivity—applies to customs violations.
The ruling establishes that the legal nature of the credit corresponding to the penalty for a customs law violation is administrative, not tax-related. Additionally, the ministers agreed that this prescription does not apply only when the breached obligation, even if within a "customs environment," was intended for tax collection and supervision of levies on the operation.
In other words, if the regulation is customs-related, it has an administrative legal nature, even if the legislator has established a tax-related procedure for determining the amount owed.
Special appeals (REsps) 2147578/SP and 2147583/SP were judged under the repetitive appeals system and registered as Topic 1293.
Federal Revenue updates CSLL rules through new Normative Instruction
The Brazilian Federal Revenue Service published Normative Instruction (IN) RFB 2259/2025, updating IN RFB 2228/2024, adapting Brazilian legislation to the GloBE Rules (Global Anti-Base Erosion Rules). The new regulation changes two main points:
Article 3: Deals with entities that do not prepare financial statements in the same fiscal year applicable to real profit;
Article 154: Reduces the fine limit for failure to provide information or providing it late from R$10 million to R$5 million.
The update is part of the implementation of tax reform, including GloBE rules, minimum IRPF and transfer pricing. This is the second adjustment to the calculation of the CSLL surtax according to the GloBE Rules.
The GloBE Rules, developed by the OECD under Pillar Two of the BEPS (Base Erosion and Profit Shifting) initiative, aim to combat the erosion of the tax base and the artificial transfer of profits to jurisdictions with low or no taxation. They establish a minimum effective tax level of 15% on the profits of large multinational groups, aiming to reduce tax wars between countries and increase transparency in the international tax system.
The GloBE Rules operate through three main mechanisms:
The rules apply to corporate groups with global revenues exceeding €750 million.
