Rio de Janeiro, Brazil – Brazil’s Ministry of the Economy has proposed initiating a 20% tax on dividends and other profit distributions received by the owners of companies. The tax would burden all distributions over R$240,000 (US$48,000) per year or R$20,000 (US$4,000) per month.
Before 1995, Brazil taxed dividends at 15-25%. Creating an exemption made Brazil one of very few countries in the world (Estonia, Hong Kong, Singapore) that does not tax dividends.
Reinstituting taxes on profit distributions will have important consequences for Brazil and Brazilians - some intended, but some unintended . . .
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