In Brazil, dividends paid by national stocks and REITs are currently tax-exempt. However, earnings received from foreign assets (such as stocks and REITs) or BDRs are subject to taxation. This simulator calculates the tax due and the effective tax rate.
| Asset Class | Gross Yield | Nominal Tax Rate | Tax Owed | Net Yield |
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Dividends distributed by Brazilian companies (S.A. and Ltda.) and national real estate investment trusts (REITs) are tax-exempt at source and in the annual declaration of the individual investor. This is a strong incentive for forming passive income portfolios.
If the investor receives dividends from companies based abroad (such as in the United States) or through BDRs of foreign companies traded on the B3, these earnings are not exempt from income tax in Brazil. The Federal Revenue requires monthly payment via Carnê-Leão (progressive table) or a flat tax depending on the classification, and it is common to offset taxes paid abroad under tax reciprocity agreements (such as the Brazil-US treaty).
For individual investors, real estate investment trust (REIT) earnings are tax-exempt as long as the fund has at least 100 shareholders, its units/shares are traded exclusively on an organized exchange or over-the-counter market, and the beneficiary holder owns less than 10% of the total units/shares of the REIT.
The United States withholds 30% of dividends paid to foreigners. Since Brazil has a tax reciprocity agreement with the US, the tax withheld there can be fully offset in the Carnê-Leão in Brazil. As 30% is higher than the maximum Brazilian tax rate (27.5%), in practice, there is no additional tax to pay in Brazil on these dividends, only the obligation to declare.