Dividend Timeline Revisions
The CAE-approved legislation introduces a significant adjustment to dividend tax deadlines, permitting tax-exempt distributions through April 30, 2026, for earnings calculated by December 31, 2025. This extends the existing year-end 2025 cutoff, offering domestic firms clearer fiscal planning.
The exemption applies exclusively to Brazilian-resident shareholders, creating an imbalance in compliance burdens for multinational corporations managing mixed investor bases. Legal analysts acknowledge the extended window enhances corporate predictability but warn of operational challenges for companies with foreign shareholders.
Concurrently, accounting associations contest the change, arguing it conflicts with standard quarterly reporting cycles. A trade union involved in ongoing litigation noted the committee’s implementation hinges on its ratification by Congress and presidential endorsement.
Phased Gambling Tax Hikes
The CAE-approved legislation implements a tiered increase in Brazil’s federal Gross Gaming Revenue (GGR) tax, rising from 12% to 15% in 2026-2027 and to 18% in 2028. The compromise replaces the contentious initial 24% proposal.
Senator Eduardo Braga defended the gradual approach, stating, “Our concern is that a sudden doubling of the rate would damage companies that chose to enter the legal framework, while irregular operators would continue to act with impunity and pay nothing into the public coffers.” Co-author Renan Calheiros explained that the structure balances fiscal responsibility with market stability.
Expected Growth
Projections suggest the incremental hikes could inject R$5 billion (2026), R$6.3 billion (2027), and R$6.7 billion (2028) into public funds, primarily earmarked for social security. Transitional provisions allow the federal government to redistribute portions to states and municipalities.
Meanwhile, authorities intensify scrutiny of illegal betting platforms linked to organized crime while imposing steeper CSLL rates on fintechs: payment institutions face increases of 9% → 12% → 15%, credit/investment firms 15% → 17.5% → 20%, and banks remain at 20%. Interest-on-equity taxes rise from 15% → 17.5%.
