Global Daily Tax News, Brazilian Senate Clears High Earner Minimum Tax Proposal, (Nov 7, 2025)

Legislation to overhaul Brazil's personal income tax regime has been signed off by the country's lawmakers.

Lawmakers in the Senate on November 5, 2025, agreed to significantly raise the tax-free allowance to BRL5,000 per month (USD926) and to reduce tax for those earning between BRL5,000 and BRL7,300.

The measure will be funded by plans to introduce a minimum tax rate of up to 10 percent on the nation's highest earners' income, including company profits and dividends.

The draft legislation was approved by the Chamber of Deputies on October 1, 2025.

Bill 1087/25 provides for progressively greater minimum tax rates, starting for taxpayers with annual income of BRL600,000 or more, before reaching 10 percent for those with income exceeding BRL1.2m. The regime will feature a sliding scale, with a 2.5 percent rate on annual income of BRL750,000; a five percent rate on annual income of BRL900,000; a 7.5 percent rate on annual income of BRL1.05m; and a 10 percent rate on annual income from BRL1.2m. In addition, a 10 percent tax rate will be imposed on dividends income received from overseas.

Ten amendments put forward at the Senate plenary were rejected, as they would have reduced government revenue.