The Brazilian Tax System: A Survivor’s Guide for Foreign Investors

Updated November 2026.

The Brazilian tax system is the set of taxes and contributions levied by the Federal Government, the 26 states and the Federal District, and the municipalities under the taxing powers allocated by the Federal Constitution (arts. 145 to 156 and 195): the Federal Government taxes income, imports, exports, manufactured products, financial and foreign exchange operations and rural property, and charges the social contributions on profit, revenue and payroll; the states tax the circulation of goods (ICMS), inheritances and gifts (ITCMD) and motor vehicles (IPVA); and the municipalities tax services (ISS) and urban real estate (IPTU and ITBI). For a company owned by foreign investors, the core of the system is the corporate income tax layer — the Corporate Income Tax (IRPJ) and the Social Contribution on Net Profit (CSLL), with a combined standard rate of 34% — together with the revenue-based taxes, the withholding taxes on payments abroad and the tax on foreign exchange operations (IOF). This guide explains each of these layers, the choice of income tax regime, the taxation of dividends and interest on net equity (JCP) paid to non-residents, the tax haven rules, double tax treaties, the CIDE on remittances, the IOF on foreign exchange and the reporting obligations to the Central Bank, as they stand in November 2026.

In brief: Brazil taxes corporate profits at a combined standard rate of 34% — IRPJ at 15% plus a 10% surcharge on annual profit above BRL 240,000, and CSLL at 9% — while banks and other financial institutions pay CSLL at higher rates. Companies choose between Lucro Real (actual profit), which is mandatory above BRL 78 million of annual revenue, and Lucro Presumido (presumed profit); Simples Nacional is not available to companies with a corporate shareholder or to branches of foreign companies. Since 1 January 2026, dividends paid or remitted abroad are subject to a 10% withholding tax under Law 15.270/2025, and interest on net equity (JCP) is subject to a 17.5% withholding tax under Complementary Law 224/2025. Payments to tax havens listed in Normative Instruction RFB 1.037/2010 bear a 25% withholding tax, and remittances for royalties and technical services also bear the 10% CIDE.

What is the Brazilian tax system and who levies each tax?

The Brazilian tax system is a three-level federal system in which the Constitution itself lists which taxes each level of government may institute, so that no tax can be created outside those powers. The Federal Government may tax imports, exports, income, manufactured products (IPI), credit, foreign exchange, insurance and securities operations (IOF), rural property (ITR) and large fortunes, and, since Constitutional Amendment 132/2023, goods and services harmful to health or the environment (CF, art. 153); the states and the Federal District tax inheritances and gifts, the circulation of goods and interstate and intermunicipal transport and communication services (ICMS) and motor vehicles (CF, art. 155); and the municipalities tax urban property, onerous transfers of real estate and services (CF, art. 156). Alongside these taxes, the Federal Government charges social contributions — CSLL on profit, PIS and COFINS on revenue and the employer’s social security contribution on payroll — and contributions of economic intervention such as the CIDE on remittances abroad.

Income taxes are levied only at the federal level: there is no state or municipal corporate income tax. The consumption taxes are in transition: under the tax reform, PIS, COFINS and IPI give way to the federal CBS and the Selective Tax from 2027, and ICMS and ISS are phased out between 2029 and 2032 and replaced by the IBS, being extinguished in 2033 (ADCT, arts. 125 to 129). The reform itself is examined in the companion guide Brazil Tax Reform 2026–2033: CBS, IBS and Timeline; this guide concentrates on income taxation and on the taxes that affect investment flows into and out of Brazil.

What is the corporate tax rate in Brazil?

The standard corporate tax rate in Brazil is 34%, made up of the IRPJ at 15%, a 10% IRPJ surcharge on the portion of taxable profit exceeding BRL 20,000 per month (BRL 240,000 per year), and the CSLL at 9% (Law 9.249/1995, art. 3; Law 7.689/1988, art. 3, III). The surcharge is computed on the profit of each assessment period — monthly multiples of BRL 20,000, that is BRL 60,000 per quarter — and is paid in full, without deductions. The CSLL is not deductible from its own base or from the IRPJ base.

Financial institutions pay CSLL at higher rates under art. 3 of Law 7.689/1988, as amended most recently by Complementary Law 224/2025: 20% for banks, which produces a combined rate of 45%; 15% for private insurers and most other financial institutions; and transitional rates, until 31 December 2027, for payment institutions (12%, rising to 15% from 2028) and for credit, financing and investment companies and capitalisation companies (17.5%, rising to 20% from 2028).

The 34% is a nominal rate on profit. It does not include the taxes on revenue, goods and services, the payroll contributions or the withholding taxes on payments abroad, which are examined in the following sections, and it does not reflect incentives that may reduce the IRPJ in specific regions or activities.

Which other taxes does a company in Brazil pay besides income taxes?

Besides IRPJ and CSLL, a company in Brazil pays PIS and COFINS on revenue, ICMS or ISS depending on whether it sells goods or services, IPI if it manufactures or imports manufactured products, and the employer’s social security contribution on payroll. PIS and COFINS are charged at combined rates of 9.25% under the non-cumulative regime, with credits on qualifying inputs (Law 10.637/2002, art. 2; Law 10.833/2003, art. 2), or 3.65% under the cumulative regime, without credits (Law 9.715/1998, art. 8, I; Law 9.718/1998, art. 8). Companies taxed on presumed profit remain in the cumulative regime (Law 10.637/2002, art. 8, II).

The ISS rate is set by each municipality within the minimum of 2% and the maximum of 5% (Complementary Law 116/2003, arts. 8 and 8-A), and the employer’s contribution is 20% of the remuneration paid to employees (Law 8.212/1991, art. 22, I). In 2026 the CBS (0.9%) and the IBS (0.1%) are charged at test rates that can be offset against PIS and COFINS; from 2027 the CBS replaces PIS and COFINS (ADCT, arts. 125 and 126). The employment side is covered in the companion guide on Labor Law in Brazil.

Which corporate tax regime can a foreign-owned company choose: Lucro Real, Lucro Presumido or Simples Nacional?

A foreign-owned company in Brazil will be taxed either under Lucro Real (actual profit) or under Lucro Presumido (presumed profit); Simples Nacional, the simplified regime for small businesses, is in practice closed to it. The choice determines how IRPJ and CSLL are calculated and, until the end of 2026, whether PIS and COFINS are non-cumulative or cumulative. The option for Lucro Presumido is made with the payment of the first instalment of the tax for the first quarter and applies to the whole calendar year (Law 9.430/1996, art. 26), so the decision must be modelled before the first tax payment.

Lucro Real

Under Lucro Real the taxable base is the accounting profit adjusted by the additions and exclusions required by tax law and recorded in the e-Lalur within the ECF. It is mandatory for companies whose total revenue in the previous year exceeded BRL 78 million, for banks, insurers and other financial institutions, for companies with profits, income or capital gains from abroad, for companies enjoying tax benefits of exemption or reduction of the tax, for companies that paid monthly estimates during the year and for factoring companies, among others (Law 9.718/1998, art. 14). Tax losses may be carried forward without a time limit, but may offset at most 30% of the adjusted profit of each period (Law 9.065/1995, art. 15); carry-back is not allowed. Lucro Real is usually preferable for companies with low margins, losses or significant creditable inputs, and it is the only regime that allows the deduction of JCP and the main federal incentives.

Lucro Presumido

Under Lucro Presumido the IRPJ and CSLL bases are fixed percentages of gross revenue, regardless of the actual profit, and the regime is available to companies with total revenue of up to BRL 78 million in the previous year that are not obliged to adopt Lucro Real. Since 2026, Complementary Law 224/2025 increases the presumption percentages by 10% on the portion of annual gross revenue exceeding BRL 5 million (BRL 1.25 million per quarter), from January 2026 for the IRPJ and from April 2026 for the CSLL (art. 4, § 4, VII, and § 5; art. 14). The rules, deadlines and the full table are explained in the Portuguese guide to Lucro Presumido: como funciona e quando optar, and the effect of the tax reform on the regime in the article on the risks facing Lucro Presumido companies.

The presumption percentages are set by art. 15 (IRPJ) and art. 20 (CSLL) of Law 9.249/1995. On the resulting base the company applies the 15% IRPJ, the 10% surcharge on the portion above BRL 60,000 per quarter and the 9% CSLL, and pays PIS and COFINS at the cumulative rate of 3.65%.

Simples Nacional

Simples Nacional is not available to a company whose capital includes another legal entity, nor to a branch, agency or representative office in Brazil of a legal entity headquartered abroad (Complementary Law 123/2006, art. 3, § 4, I and II). A Brazilian subsidiary held by a foreign company is therefore excluded, and the acquisition of a Simples Nacional target by a foreign group leads to its exclusion from the regime; the cash-flow effect of the migration should be modelled in the transaction. The taxation of dividends paid by Simples Nacional companies to individuals is discussed in the article on dividends in Simples Nacional.

How do Lucro Real and Lucro Presumido compare in practice?

Lucro Presumido is cheaper only when the actual profit margin is higher than the presumed margin and the company has few creditable inputs; otherwise Lucro Real tends to produce a lower burden. The illustration below compares, for calendar year 2026, a service company with gross revenue of BRL 10 million spread evenly over the four quarters and a taxable profit under Lucro Real of BRL 3 million (30% of revenue). Under Lucro Presumido, the 10% increase of Complementary Law 224/2025 applies to the revenue above BRL 1.25 million per quarter, for the IRPJ from the first quarter and for the CSLL from the second quarter.

In this example Lucro Real produces a lower total burden whenever the PIS and COFINS credits on inputs exceed BRL 441,200, which at the combined rate of 9.25% corresponds to creditable purchases of about BRL 4.77 million; with fewer credits, Lucro Presumido is cheaper. If the actual margin were 20%, the Lucro Presumido base would exceed the actual profit by a wide margin and Lucro Real would become clearly preferable. From 2027, when the CBS replaces PIS and COFINS under the non-cumulative rules of Complementary Law 214/2025, the revenue-tax side of this comparison changes and the choice will turn essentially on income taxes.

How are dividends paid to foreign shareholders taxed in Brazil?

Since 1 January 2026, profits and dividends paid, credited, delivered, employed or remitted abroad by a Brazilian company are subject to a 10% withholding income tax, under art. 10, § 4, of Law 9.249/1995, as amended by Law 15.270/2025, of 26 November 2025. The rule ended the exemption that the same art. 10 had previously granted to dividends paid abroad.

The withholding does not apply to profits relating to results up to calendar year 2025 whose distribution was approved by 31 December 2025 and that are paid on the terms originally provided in the act of approval, nor to payments to foreign governments with reciprocity, sovereign wealth funds and foreign pension entities (art. 10, § 5). The non-resident beneficiary may opt for a credit when the effective tax rate on the distributing company’s profits plus the 10% withholding exceeds the sum of the nominal IRPJ and CSLL rates (art. 10-A). The cut-off for approvals was extended to 31 January 2026 by an interim decision of the Supreme Federal Court in ADIs 7.912 and 7.914, whose confirmation by the full court is still pending.

For resident individuals, the same Law 15.270/2025 created a 10% withholding on dividends above BRL 50,000 per month paid by the same company and a minimum income tax for high incomes. The dividend and JCP rules are analysed in Portuguese in the article on juros sobre capital próprio em 2026.

What is interest on net equity (JCP) and how is it taxed in 2026?

Interest on net equity (juros sobre capital próprio, JCP) is a remuneration that a company taxed under Lucro Real may pay to its shareholders on the capital invested, calculated on specified equity accounts at the variation of the long-term interest rate (TJLP) and deductible for IRPJ and CSLL purposes (Law 9.249/1995, art. 9). The deduction is limited to the greater of 50% of the profit of the period before the deduction and 50% of retained earnings and profit reserves, and, since 2024, the equity accounts that form the base were restricted by Law 14.789/2023.

From 1 January 2026, Complementary Law 224/2025 (art. 8) raised the withholding tax on JCP from 15% to 17.5%; Provisional Measure 1.303/2025 lost effect without being converted into law. The JCP are not subject to the 10% dividend withholding of Law 15.270/2025, but when the beneficiary is resident in a jurisdiction with favoured taxation the 25% rate of art. 8 of Law 9.779/1999 must be examined. In simplified terms, the company saves IRPJ and CSLL at 34% on the amount paid and the shareholder bears 17.5% at source, so the net advantage over dividends has narrowed; whether a double tax treaty reduces the withholding depends on how the treaty and its protocol characterise JCP — as interest or as dividends — which must be checked treaty by treaty.

What taxes apply to royalties and technical services paid abroad?

A Brazilian company that pays royalties, technology fees, technical assistance or technical and administrative services to a non-resident generally bears four charges: withholding income tax at 15%, the 10% CIDE on remittances, PIS/COFINS-Import on services and, for services, the ISS. The withholding tax is 15% on royalties and on technical and administrative assistance (Provisional Measure 2.159-70/2001, art. 3), rising to 25% when the beneficiary is resident in a tax haven (Law 9.779/1999, art. 8). The CIDE, created by Law 10.168/2000, is charged at 10% on the amounts paid, credited, delivered, employed or remitted abroad for royalties of any nature, supply of technology, technical assistance and technical and administrative services (art. 2). Imported services also bear PIS-Import at 1.65% and COFINS-Import at 7.6% (Law 10.865/2004, art. 8, II) and the ISS on services from abroad (Complementary Law 116/2003, art. 1, § 1).

The scope of the CIDE, its constitutionality and the treatment of software are examined in the article on CIDE-remessas; the PIS/COFINS-Import will be replaced by the CBS and the IBS on imports, explained in the article on IBS and CBS on imports.

Which jurisdictions does Brazil treat as tax havens?

Brazil treats as a tax haven — in the statutory language, a country or dependency with favoured taxation — a jurisdiction that does not tax income or taxes it at a maximum rate below 17%, or whose legislation does not allow access to information on the shareholding, ownership or beneficial owners of legal entities (Law 9.430/1996, art. 24, as amended by Law 14.596/2023); it separately treats as privileged tax regimes the regimes described in art. 24-A. The official list is set by Normative Instruction RFB 1.037/2010, of 4 June 2010, with its later amendments, the most recent by Normative Instruction RFB 2.265, of 9 May 2025, which removed the United Arab Emirates from the list.

The classification has concrete consequences for foreign investors: payments to residents of listed jurisdictions bear withholding income tax at 25% instead of 15% (Law 9.779/1999, art. 8), and, for Brazilian-resident individuals, the profits of controlled entities located there are computed annually under Law 14.754/2023, even if not distributed. A group that routes its investment in Brazil through an intermediate holding company should therefore check the jurisdiction of each entity in the chain against the current version of the list. The concepts are developed in Portuguese in the article on offshores e paraísos fiscais.

Does Brazil have double tax treaties, and is there one with the United States?

Brazil has income tax treaties to avoid double taxation with a network of jurisdictions listed by the Receita Federal, but the United States is not among them. The Receita Federal’s official list of treaties (updated on 28 August 2026) names 39 jurisdictions: South Africa, Germany, Argentina, Austria, Belgium, Canada, Chile, China, South Korea, Denmark, the United Arab Emirates, Ecuador, Slovakia, Spain, the Philippines, Finland, France, Hungary, India, Israel, Italy, Japan, Luxembourg, Mexico, Norway, the Netherlands, Peru, Poland, Portugal, the Czech Republic, Russia, Singapore, Sweden, Switzerland, Trinidad and Tobago, Turkey, Ukraine, Uruguay and Venezuela. The treaty with Germany, however, has had no effect since 1 January 2006, so payments between Brazil and Germany are governed only by the domestic law of each country.

Where a treaty applies, it may reduce the Brazilian withholding tax on dividends, interest, JCP and royalties below the domestic rates, subject to the beneficial ownership and anti-abuse clauses of each treaty and to the methods of application set by the Ministry of Finance. Because the 10% dividend withholding is new, treaty benefits on dividends must be reviewed against the text and protocol of each treaty, and the characterisation of JCP — interest or dividends — varies between treaties. In the absence of a treaty, as in the case of the United States, the foreign tax credit, if any, depends on the investor’s home-country law.

How is IOF charged on foreign exchange operations for foreign investors?

The IOF on foreign exchange is charged on each currency conversion, at rates set by decree within the limits of the law, and since Decree 12.499/2025 most outflows of funds bear 3.5%, while inflows bear 0.38% and remittances of dividends and JCP to foreign investors bear zero (Decree 6.306/2007, art. 15-B). For a foreign investor the rates that matter most are those on the inflow of capital, on loans from abroad and on the return of income and capital.

The IOF on credit operations, the sequence of the 2025 decrees and the litigation before the Supreme Federal Court are examined in Portuguese in the IOF rate table for 2026.

What tax incentives are available to companies investing in Brazil?

The main federal incentives for companies investing in Brazil are the deduction for research and development under the Lei do Bem, the 75% reduction of IRPJ for projects in the SUDAM and SUDENE regions and the regime of the Manaus Free Trade Zone, all of them requiring Lucro Real for the income tax benefits. Under art. 19 of Law 11.196/2005, a Lucro Real company may exclude from taxable profit and from the CSLL base up to 60% of the expenditure on technological research and development of innovation, a percentage that may reach 80% depending on the number of researchers hired (art. 19, § 1). Companies with projects for installation, expansion, modernisation or diversification in priority sectors in the areas of SUDENE (Northeast) and SUDAM (Amazon) approved by 31 December 2028 are entitled to a 75% reduction of the IRPJ and surcharge calculated on the profit from the incentivised activity (Provisional Measure 2.199-14/2001, art. 1, as amended by Law 14.753/2023). The Manaus Free Trade Zone, created by Decree-Law 288/1967, is maintained by the Constitution until 2073 (ADCT, art. 92-A).

Two recent statutes changed the value of incentives. Law 14.789/2023 replaced, from 1 January 2024, the exclusion of state investment subsidies from the IRPJ and CSLL bases with a tax credit equal to 25% of the qualifying subsidy revenue, available only under Lucro Real and subject to prior qualification (arts. 6 and 22), a regime explained in the article on subvenção para investimento. Complementary Law 224/2025, in turn, reduced federal tax benefits as a rule from 2026, with effect from 1 January 2026 for the IRPJ and from 1 April 2026 for the CSLL and the contributions (art. 4 and art. 14), so the current value of each incentive must be checked against its exceptions; the Lei do Bem is analysed in the guide to the Lei do Bem.

How do transfer pricing and the Pillar Two minimum tax apply in Brazil?

Brazil applies transfer pricing rules aligned with the arm’s length principle of the OECD since 1 January 2024, under Law 14.596/2023, which taxpayers could elect to apply from 1 January 2023 (arts. 45 and 47). The rules replaced the former fixed-margin methods and apply to cross-border transactions between related parties, so intercompany agreements, documentation and pricing policies made under the old rules must be reviewed.

The global minimum tax was implemented through Law 15.079/2024, of 27 December 2024, which instituted an Additional CSLL to ensure a minimum effective taxation of 15% in line with the OECD GloBE Rules, with effect from 1 January 2025 (arts. 2 and 43). It applies to constituent entities in Brazil of multinational groups with annual consolidated revenue of EUR 750 million or more in at least two of the four fiscal years immediately preceding the year under analysis. Given the 34% nominal rate, most subsidiaries will have an effective rate above 15%; the exposure is concentrated in entities whose effective rate is reduced by incentives, such as the SUDAM and SUDENE reduction or the Manaus regime.

What reporting obligations apply to cross-border structures, including the CBE and the offshore law?

Residents in Brazil — companies and individuals — that hold assets abroad must report them to the Central Bank in the Brazilian Capital Abroad declaration (CBE) when they total USD 1 million or more on 31 December, and quarterly when they total USD 100 million or more on 31 March, 30 June and 30 September, under Law 14.286/2021 and Central Bank Resolution 279/2022 (see the Central Bank CBE page). The CBE is relevant for the Brazilian side of a group — a Brazilian subsidiary with investments abroad, or Brazilian-resident shareholders and executives — and is distinct from the income tax returns.

Brazilian-resident individuals who control entities abroad are subject to Law 14.754/2023, the offshore law, in force since 1 January 2024: the profits of controlled entities located in tax havens or under privileged regimes, or with own active income below 60% of total income, are computed on 31 December of each year, even if not distributed, and taxed at 15% in the annual income tax return. The regime is explained in the article on the offshore law, and the rules on funds and financial investments abroad in the article on Law 14.754/2023. At company level, Lucro Real taxpayers must also file the digital bookkeeping modules of the SPED, including the ECD, the ECF and the EFD-Contribuições.

How does the 2026–2033 tax reform affect corporate taxation?

The consumption tax reform does not change IRPJ or CSLL, but it replaces the revenue and consumption taxes that sit alongside them. Under Constitutional Amendment 132/2023 and Complementary Law 214/2025, 2026 is a test year with a CBS of 0.9% and an IBS of 0.1% that can be offset against PIS and COFINS; in 2027 the CBS is collected, PIS and COFINS are extinguished and the IPI is reduced to zero except for Manaus Free Trade Zone products; in 2027 and 2028 the IBS is charged at 0.05% for states and 0.05% for municipalities; from 2029 to 2032 ICMS and ISS rates fall to 9/10, 8/10, 7/10 and 6/10; and in 2033 ICMS and ISS are extinguished (ADCT, arts. 125 to 129).

Three consequences matter for foreign-owned companies: the PIS/COFINS dimension of the choice between Lucro Real and Lucro Presumido disappears from 2027; state ICMS incentives lose value as ICMS is phased out, with a compensation fund for certain benefits until 2032; and the tax cost of supply chains will be recalculated under a non-cumulative, destination-based VAT. The details are in Brazil Tax Reform 2026–2033, in the Portuguese guide to the reforma tributária and in the article on the 2026–2033 transition; the effect on financial investments is discussed in the article on IBS, CBS and investments.

What should a foreign investor check before structuring an investment in Brazil?

Before structuring an investment in Brazil, a foreign investor should model the income tax regime, the cost of repatriating profits and the treaty position of each entity in the chain, because these three variables determine most of the tax cost. In practice, the review usually covers the following points:

• the regime election (Lucro Real or Lucro Presumido) against the expected margin, the creditable inputs and the 10% increase in presumption above BRL 5 million;
• the repatriation mix between dividends (10% withholding since 2026) and JCP (17.5% withholding, deductible only under Lucro Real);
• the residence of each shareholder against the tax haven list of IN RFB 1.037/2010 and against the treaty network, bearing in mind that there is no treaty with the United States and that the treaty with Germany has had no effect since 2006;
• the withholding tax, CIDE, PIS/COFINS-Import, ISS and IOF on royalties and service fees paid to the group;
• intercompany pricing under Law 14.596/2023 and, for large groups, the Additional CSLL of Law 15.079/2024;
• the effect of the consumption tax reform on prices, credits and state incentives from 2027.

Many disputes with the tax authorities begin with ancillary obligations rather than with the main tax. How a federal tax assessment works, and how it can be challenged, is explained in Portuguese in the article on the auto de infração.

Frequently asked questions

What is Brazil’s corporate income tax rate?

The standard corporate tax rate in Brazil is 34%: IRPJ at 15%, a 10% IRPJ surcharge on taxable profit above BRL 240,000 a year, and CSLL at 9% (Law 9.249/1995, art. 3; Law 7.689/1988, art. 3). Banks pay CSLL at 20%, for a combined 45%, and insurers and most other financial institutions at 15%.

Is there a tax treaty between Brazil and the United States?

No. The Receita Federal’s list of treaties to avoid double taxation, updated on 28 August 2026, names 39 jurisdictions and does not include the United States. The treaty with Germany appears on the list but has had no effect since 1 January 2006.

What withholding tax applies to dividends paid abroad by a Brazilian company?

Since 1 January 2026, dividends paid or remitted abroad are subject to a 10% withholding tax (Law 9.249/1995, art. 10, § 4, introduced by Law 15.270/2025). Profits from results up to 2025 approved by 31 December 2025 and paid on the terms of the act of approval, and payments to foreign governments with reciprocity, sovereign funds and foreign pension entities, are not subject to the withholding.

What is the withholding tax on JCP in 2026?

The withholding tax on interest on net equity (JCP) is 17.5% from 1 January 2026, up from 15%, under art. 8 of Complementary Law 224/2025. JCP are not subject to the 10% dividend withholding, and a lower rate may apply under a double tax treaty depending on how the treaty characterises them.

What is the difference between Lucro Real and Lucro Presumido?

Lucro Real taxes the actual accounting profit adjusted by tax rules and is mandatory above BRL 78 million of annual revenue and for financial institutions; Lucro Presumido taxes a fixed percentage of revenue (8% for commerce and industry and 32% for services in general for the IRPJ), increased by 10% on revenue above BRL 5 million a year since 2026.

Can a foreign-owned company use Simples Nacional?

No. Simples Nacional is not available to a company whose capital includes another legal entity, nor to a branch or representative office in Brazil of a company headquartered abroad (Complementary Law 123/2006, art. 3, § 4, I and II).

Which countries does Brazil consider tax havens?

The list is set by Normative Instruction RFB 1.037/2010, as amended most recently by Normative Instruction RFB 2.265/2025, which removed the United Arab Emirates. By law, a tax haven is a jurisdiction that does not tax income or taxes it below 17%, or that does not allow access to ownership information (Law 9.430/1996, art. 24), and payments to residents there bear a 25% withholding tax.

What IOF applies when a foreign investor sends money into or out of Brazil?

Inflows of funds generally bear IOF at 0.38%, remittances of dividends and JCP to foreign investors and the return of foreign investment in equity bear zero, foreign loans of up to 364 days bear 3.5%, and most other outflows, such as payments for services abroad, bear 3.5% (Decree 6.306/2007, art. 15-B, as amended by Decree 12.499/2025).

Has Brazil implemented the OECD Pillar Two minimum tax?

Yes. Law 15.079/2024 instituted an Additional CSLL that ensures a minimum effective taxation of 15% for constituent entities of multinational groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding years, with effect from 1 January 2025.

Conclusion

Brazil’s tax system is demanding less because of its nominal rates than because of its structure: three levels of government, a choice of income tax regime that also shapes the revenue taxes, and a series of charges on cross-border payments that apply cumulatively. For a foreign investor, the 34% corporate rate is only the starting point; the decisive variables are the regime election, the repatriation mix between dividends and JCP after the 2026 changes, the residence of each entity in the investment chain against the tax haven list and the treaty network, and the cost of royalties, services and foreign exchange.

The system is also changing on two fronts at once. On the income side, Law 15.270/2025 and Complementary Law 224/2025 have, since January 2026, taxed dividends paid abroad and raised the withholding on JCP; on the consumption side, the 2026–2033 reform replaces five taxes with a dual VAT. Structures designed under the previous rules should be reviewed against both sets of changes.

Further reading

• Brazil Tax Reform 2026–2033: CBS, IBS and Timeline
• Doing Business in Brazil: A Legal Guide for Foreign Investors
• Tax Lawyer Brazil: Legal Counsel for Foreign Investors
• Labor Law in Brazil
• Juros sobre capital próprio em 2026: IRRF de 17,5% e regras (in Portuguese)
• Tributação de offshores e paraísos fiscais (in Portuguese)

See all content in the Tax Law practice area.