Doing Business in Brazil

Brazil now taxes dividends for the first time in 30 years

For almost three decades, one of Brazil’s quiet advantages was that profits sent back to foreign shareholders were not taxed at source. That changed on January 1st of 2026. Under Law  15.270/2025, Brazil now applies a 10% tax on dividend payments to foreign investors that exceed BRL 50.000 per month (around EUR 8,565.00 today)— ending a long-standing exemption and bringing the country in line with most of the world.

In practical terms: if a Brazilian subsidiary sends profits back to The Netherlands, 10% of that amount now stays in Brazil.

That sounds straightforward, but there are two important nuances. First, Brazil’s corporate tax rate is already around 34% — one of the highest in the world. To avoid taxing the same profits twice at excessive rates, the law includes a safety valve: if the combined tax burden exceeds 34%, companies can apply for a partial refund. In most cases, the new 10% is, therefore, not fully additional — it is more of a rebalancing within the existing system.

Profits built up before 31 December 2025 could still be distributed tax-free, as long as the distribution was formally approved before that date. Companies that took that step in time have until the end of 2028 to actually transfer the money — a window that is still open. Other strategies can also reduce dividend tax due: for instance, using profits to increase invested capital (shares) in the company. Anyhow, professional advice can help entrepreneurs navigate the sometimes complex tax structure and changes in Brazil.

The Dutch-Brazilian tax treaty is more valuable than ever

Not every country has a tax treaty with Brazil but The Netherlands does — and that matters more now than it did before.

The 1990 tax treaty between the Netherlands and Brazil provides a legal framework that helps prevent double taxation and offers rules about how profits, interest, and royalties are treated across borders. For companies investing in Brazil with a Dutch structure or base, this treaty remains one of the strongest arguments for routing through the Netherlands rather than another country.

In short: the Netherlands is well positioned as a gateway for Dutch and international companies doing business in Brazil. That position has not weakened — if anything, the new tax environment makes the treaty more relevant than ever.

The EU–Mercosur trade deal: a bigger opportunity on the horizon

While the tax changes are important, the EU–Mercosur trade agreement may matter even more in the long run. Negotiations between the European Union and the South American trade bloc — Brazil, Argentina, Uruguay, and Paraguay — ended with a deal, and a provisory start has been made. The agreement is significantly reducing tariffs on both sides, at once or gradually (and sometimes with specific safeguards) making it easier and cheaper to trade between Europe and Brazil.

For Dutch companies, the opportunities are particularly strong in:

• Agri-food and technology: Dutch expertise and technology in seeds, agricultural and horticultural equipment, precision farming tools, climate adaptation and water management and Brazilian producers are aware;
• Sustainability: Brazilian producers increasingly need to meet European sustainability and safety standards — a space where Dutch knowledge and experience add real value;
• Logistics: The Netherlands, as a world leader in logistic systems, can contribute in many areas - from multimodal integration to cold chains, supply chain optimization, an so on;

Furthermore, the free trade agreement could open significant new export and investment opportunities for companies already active in Brazil, because its improves the business case of existing operations. That means that assets already in Brazil can suddenly become more competitive and profitable.

Practical considerations: land and local knowledge

For companies thinking about physical investments in Brazil — farmland, production facilities, or processing plants — one practical reality is worth knowing: land ownership in Brazil can be complex. Legal registration systems are incomplete in some regions, land is often lacking conformity with environmental rules, foreign ownership is restricted in certain categories, and disputes over land titles occur.

This is not a reason to stay away — but it is a reason to invest in proper legal advice and reliable local partners before committing. Well-prepared investors with carefully thought-through projects navigate these issues easier.

What this means for Dutch investors

Brazil is not becoming a harder place to do business — it is becoming a more normal one. The new dividend tax brings Brazil closer to how most countries operate. The improving legal framework reduces uncertainty. And the EU–Mercosur agreement could be a genuine strategic game-changer for trade flows between Europe and South America.

For Dutch companies, the combination of a solid bilateral tax treaty, strong sectoral expertise, and growing Brazilian demand for sustainable agricultural solutions makes this a good moment to take Brazil seriously — or to reassess an existing presence there.

Want to know more?

The Netherlands Agricultural Network is here to help you navigate these developments and connect with the right partners on the ground. For more information or a conversation about your specific situation, please contact the Netherlands Agricultural Network in Brazil: BRA-LVVN@minbuza.nl