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Dear all,

Last night (November 5), the Federal Senate unanimously approved Bill No. 1,087/2025, which now goes for sanction. The new IRPF (Individual Income Tax) exemption brackets were approved, set at up to BRL 5,000.00 (full exemption) and BRL 7,350.00 (partial exemption). As a compensatory measure, a new tax on “super-rich” individuals will also be introduced.

The new Minimum Individual Income Tax (IRPFM) will apply to annual income exceeding BRL 600,000.00. From that threshold, the tax will be levied at progressive rates ranging from 1% to 10%, with a 10% cap for all annual income above BRL 1,200,000.00. The final IRPFM rate will be determined in the taxpayer’s annual income tax adjustment.

Profits and dividends received by Brazilian residents falling within high-income thresholds will also be subject to withholding income tax. A 10% rate will apply whenever the total monthly amount exceeds BRL 50,000.00, representing an advance payment of the total tax due.

Profits and dividends paid to individuals or legal entities residing abroad will be subject to a definitive 10% withholding tax, regardless of the amount.

Profits and dividends approved for distribution by December 31, 2025, will remain exempt from taxation, even if paid up to 2028. Profits from previous periods that have not been allocated by the company by year-end may be subject to a 10% withholding tax (IRRF).

Given the importance of these matters and the approval of the bill, Andersen Ballão Advocacia remains available for any further clarifications.