The Brazilian Corporate Tax Reform

Brazil’s Chamber of Deputies approved Bill of Law No. 2337/2021 that proposes significant changes to Brazil’s corporate income tax:

o   Reducing the current rate of 15% to 12.5% in 2022 and 10% in 2023;

o   A withholding for dividends at a 20% rate;

o   If the dividends’ beneficiary is located in a low-tax jurisdiction, this rate would increase to 30%;

All investment funds will be subject to a flat 15% withholding taxes upon redemption, including distributions received by individuals from real estate investment funds.

We are expected to see changes in the tax treatment of capital gains generated by the indirect disposal of assets located in Brazil.

The Bill now moves to the Senate, and if approved will be affective in January 1st, 2022.