Proposal by Brazil’s Ministry of Economy foresees taxation of dividends at 20%

The levy on dividends is intended to finance the reduction of the corporate income tax (IRPJ) by five percentage points, from 25% to 20%.

RIO DE JANEIRO, BRAZIL - The Ministry of Economy has defined a proposal to tax dividends greater than R$240,000 (US$47,000) per year at 20%.

Minister Paulo Guedes' team is now reviewing the dividend tax proposal at the request of the Planalto Palace to include the exempt amoung in the draft.

At present, this form of profit distribution is completely tax-exempt. Originally, the economic team worked with a tax rate of 15% without any exemption, but there were already considerations to increase it to 20%. With the idea of an exemption amount, the higher tax rate gained . . .

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