5 tips to prepare for taxation on dividends

Play and stay on top of the updates that will transform the accounting landscape in 2026.

From 2026, profits and dividends distributed to individuals will be subject to Withholding Income Tax (IRRF) from 10% on amounts exceeding a monthly limit. In other words, dividends - which are the portion of a company's net profit distributed to partners or shareholders - will no longer be totally exempt and will now be partially taxed.

In this article, aimed at entrepreneurs and managers, we explain what will change with the new taxation on dividends and we present 5 practical tips on how to prepare for this change. The aim is to guide you through concrete actions you can take right now to minimize tax impacts when the law comes into force.

What will change with the taxation of dividends?

Currently, any amount of profit distributed to shareholders is exempt from personal income tax. In other words, entrepreneurs can withdraw profits in the form of dividends without paying IR, paying taxes only on the company. With the new rule in 2026, this will change: there will be an exemption limit and everything over this ceiling will be taxed.

Only the first R$ 50,000 per month, per company, in dividends paid to the same individual will be exempt; what exceeds this amount will have 10% IR withheld at source by the payer themselves.

Only the first R$ 50,000 per month, per company, in dividends paid to the same individual will be exempt; what exceeds this amount will have 10% IR withheld at source by the payer themselves.

In other words, the company that distributes dividends above the monthly limit will deduct 10% from the excess amount and pay this tax to the IRS.

It is important to note that pro-labore (the “salary” of the managing partners) continues to be taxed normally according to the progressive IR table and subject to social security contributions, as it has always been. The difference is that, within the reform, the IRPF exemption range for salaries will be increased to R$ 5,000 in 2026, which favors those who receive smaller salaries. Dividends, on the other hand, which were previously not taxed at all, will now be taxed at 10% for high amounts.

In practice, entrepreneurs who used to withdraw a large part of their earnings as exempt dividends will need to rethink their remuneration strategy. Profiles such as partners of medium-sized companies (Lucro Presumido or Lucro Real) who kept a low pro-labore and distributed almost all the profit as dividends, or self-employed professionals with their own company who paid themselves mostly through profits, will be directly impacted.

On the other hand, smaller businesses and distributors of modest profits may continue to be exempt, since they don't exceed the monthly ceiling (for example, a distribution of up to R$ 50,000 per month per partner will remain untaxed).

In short, from 2026 the partners who receive high profits will pay more tax, while those within the exemption limit will continue without additional taxation. The company becomes responsible for withholding and collecting income tax on excess dividends, which brings with it new tax obligations. Faced with this significant change in the tax scenario, it is essential to understand how to prepare. Here are five practical tips to help your company adapt to the new rules with the minimum of fuss.

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5 practical tips to prepare for taxation on dividends

How can entrepreneurs anticipate and adapt to this new taxation? Check out five practical measures that you can adopt right away:

1 - Review the corporate structure and the pro-labore.

Evaluate whether the current structure of partners and the form of remuneration are optimized for the new scenario. It may make sense to adjust the shareholding among family members or trusted partners in order to make better use of the exemption limit of R$ 50,000 per person - for example, a family holding can distribute profits to several members (spouse, children) in a planned way, diluting the amounts per CPF and reducing the incidence of tax within the legal limit.

Likewise, re-evaluate the pro-labore of the partners: with the IRPF exemption extended to salaries of up to R$ 5 thousand (and partial reduction of the tax rate up to around R$ 7.5 thousand per month), it can be advantageous to increase the salary a little in 2026.

Paying members a reasonable monthly salary (rather than symbolic amounts) ensures that part of the withdrawal is exempt on their paychecks. reduces dependence on distributing all earnings via dividends (which above the limit would be subject to IR 10%). In addition, an adequate pro-labore ensures contributions to the INSS and other labor benefits for the partners, reinforcing their personal financial security.

2 - Plan profit distribution in advance.

If your company has accumulated profits from previous years or even from 2025, consider distributing them before the new taxation kicks in.

The legislation passed an important transition ruleprofits calculated up to 31/12/2025 will remain exempt from IR 10% **provided that the distribution of these profits is **formally approved by December 31, 2025. This means that you don't necessarily have to pay everything to the partners immediately, but you do have to deliberate and register the allocation of profit in 2025 (by assembly, balance sheet, etc.) to guarantee the exemption, effectively being able to pay these amounts to the members throughout 2026 and subsequent years without tax.

If you miss this deadline and only distribute those old profits in 2026 or later, they will will be taxed with 10% at source normally. Many business owners are already moving to take advantage of this exemption window until the end of 2025, so don't leave it to the last minute: discuss with your accountant the best way to make the most of it. advance distributions of profits and reserves before the year is out.

Looking ahead, also plan future distributions strategically - for example, it might be useful to avoid concentrating all profits in a single month; If possible, distribute it in smaller monthly installments throughout the year, keeping within the limit of R$ 50,000 per month exempt.

Just remember that even if you divide the amounts monthly between several companies or periods, if the annual sum per CPF exceeds R$ 600,000, you will be taxed on the minimum tax in the annual IR adjustment.

Rodrigo Ribeiro - Partner and Accountant at CLM Controller

In short, make a schedule of withdrawals in advance in order to optimize the use of exemptions and avoid surprises.

3 - Reassess contracts and tax regimes

This is the time to carry out a comprehensive review of your tax planning and the company's legal instruments. Check if any articles of association or shareholders' agreement needs to be adjusted in line with the new rules (e.g. profit-sharing agreements, minimum profit clauses, etc.).

Most importantly:

Reconsider the company's tax regime for 2026. Depending on your case, it may be advantageous to change the taxation option (Simples Nacional, Lucro Presumido or Lucro Real) to minimize the total burden of taxing dividends.

Also evaluate alternatives for remunerating partners that are fiscally efficient: one of them is the Interest on Equity (JCP). JCP is still allowed and is taxed at 15% at source, but it has the advantage of being deductible from the company's taxable profit, which can result in total tax savings and an increase in the net amount passed on to shareholders. In 2026, JCP tends to remain advantageous mainly for Real Profit companies, so it's worth discussing with your accountant whether this strategy fits your business

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4 - Implement more precise financial controls.

ith more complexity in taxation, there is also a greater need for strict financial and accounting control of your company. It will be essential to monitor this closely:

• Monthly and accumulated profits: monitor the profit calculated each month and keep clear records of profits accumulated up to 2025 separate from profits from 2026 onwards, as they will be treated differently (old profits approved up to 2025 are exempt from distribution; new profits will be taxed).

• Distributions to partners: keep track of exactly how much dividends each shareholder receives each month from each company, so you know when you will exceed the R$ 50,000 limit and need to withhold tax.

• Calculation of withholding taxes: prepare to correctly calculate and collect the new IRRF of 10% when due - this may require adaptations to the payroll/finance system to issue DARFs, reports, etc.

• Annual adjustment of the minimum tax: remember that you'll need to consolidate each partner's total income for the year (salaries, rents, dividends, etc.) to check whether the high income minimum tax applies. In other words, even if no specific month has been withheld, in the annual return the taxpayer will have to compare the tax paid vs. the minimum due on income > R$ 600 thousand.

Absolutely, both taxpayers and paying companies will need to be more careful in their tax calculations and records from now on. A slip-up in accounting for a distribution or in complying with the exemption limit can mean paying too much tax (or getting into trouble for underpaying).

This extra care will ensure that your company comply with obligations correctly and avoid fines or undue payments. Remember the saying: “You can't manage what you can't measure” - so start measuring everything that involves the partners' remuneration and the business result more thoroughly.

5 - Seek support from a specialized accounting firm

Finally, don't try to face this change alone - professional support is crucial. Tax rules will become more complex and each company will have its own particular challenges to deal with. Therefore, consider hiring or consulting a specialized accounting and tax advice, who can analyze your business scenario in detail and guide you towards the best strategies. A good accountant or tax consultant will help you implement all the above tips in a coordinated and secure manner, as well as identifying tax saving opportunities within the law that may go unnoticed. Count on these experts to simulate scenarios, avoid misinterpretations of the law and put together a tailor-made tax plan.

Frequently Asked Questions (FAQ)

Are dividends and pro-labore the same thing?
No. Dividends are the portion of a company's net profit distributed to partners or shareholders, in proportion to their shareholding. The pro-labore is the fixed remuneration paid to managing partners for their work in the company - in other words, it is the partners' monthly salary (on which INSS and Income Tax are levied at source, as with any payroll).

When do the new rules come into force?
The new rules come into force on January 1st, 2026. Any distribution of profits made from from that date will be subject to 10% taxation (if it exceeds the monthly limit). Until December 31, 2025, the total exemption for dividends paid in that period will continue to apply. Therefore, 2025 is the last year with the old regime; in 2026, profit distributions will have to follow the new rules.

Who pays more tax with the new taxation?
Mainly, shareholders or investors who receive large amounts of dividends. If you usually receive dividends in excess of R$ 50,000 per month from the same company, you will have 10% tax withheld on the portion that exceeds this amount.

How to adjust the company payroll?
One of the main actions is review the partners' pro-labour. In 2026, it will be interesting to establish an adequate pro-labour, taking advantage of the fact that the first R$ 5,000 of monthly salary will be exempt from IR (and up to around R$ 7,350 will have a partial discount on the rate).

Conclusion

The taxation of dividends from 2026 marks a historic change in the Brazilian tax landscape, requiring businesspeople and entrepreneurs to adapt. Those who prepare in advance will be in a better position to minimize impacts and even identify opportunities brought about by this new rule. Where before it was enough to distribute profits freely, now it will be necessary to plan withdrawals, possibly reinvest part of the profits in the business or adjust the way partners are remunerated.

 A CLM Controller accounting is positioning itself as a strategic partner for your company in this transition process. With extensive experience in tax consultancy and financial planning, CLM's team is ready to help you interpret the new rules and draw up a tailor-made action plan. we are on hand to walk alongside you, offering security, clarity and technical solutions so that your company not only get ready for taxation on dividends, but thrive even in a new tax environment. contact us now.