Key figures — as of 2026-09-07: Brazil's Law 15,270/2025 imposes a 10% withholding tax on dividends paid to non-residents from 1 January 2026 — ending an exemption that had run since 1996 — while Portugal continues to tax the same dividends at a flat 28% for resident individuals; Brazilian-resident taxpayers in Portugal file their IRS return between 1 April and 30 June 2026, and the Portugal-Brazil tax treaty typically caps the creditable foreign rate at 10–15% on dividends.
A new tax stop before the money even lands
For years, dividends flowing out of Brazil arrived untouched at source — Brazil was one of only a handful of countries that did not tax dividends before this law, which reintroduces a 10% withholding tax on dividends remitted overseas. That changed on 1 January 2026. Brazil enacted Law 15,270/2025, reintroducing withholding income tax on dividends after nearly three decades of exemption, with dividends remitted to non-resident shareholders subject to 10% withholding regardless of amount or jurisdiction.
For the tens of thousands of Brazilians who moved to Portugal in recent years — many still holding shares, quotas or investment funds back home — this is not an abstract corporate-tax footnote. It is a line item that now shows up on every dividend statement, and one that has to be reconciled correctly on the Portuguese IRS return.
What Portugal does with that income
Portugal has not changed its own rules. Tax residents still owe a 28% flat rate on dividends, unless they opt for aggregation, and this applies to Brazilian-source dividends just as it does to Portuguese ones. The mechanism for avoiding a full double hit is the foreign tax credit: Portuguese tax residents pay a 28% flat rate on dividends, unless they opt for aggregation, and foreign withholding tax is credited only up to the treaty ceiling, so the source country matters.
That treaty ceiling matters here. Brazil's domestic treaties, including the one with Portugal, generally cap the source-country rate on dividends in the 10–15% range, and — as one Brazilian law firm noted when the bill passed — it is essential to analyze existing Double Tax Conventions between Brazil and the countries of residence of shareholders, as these treaties may provide for tax credits in the investor's country of residence, mitigating double taxation, though even with an existing DTC the new 10% dividend taxation may represent an additional cost. Because Brazil's new withholding rate sits inside that treaty band, the 10% paid in Brazil should, in principle, be fully creditable against the 28% owed in Portugal — but only if the credit is claimed correctly, with proof of the Brazilian tax actually withheld.
GrowIN's read on the numbers
Run the arithmetic on a typical case. A Brazilian retiree or investor in Portugal receiving €20,000 a year in dividends from Brazilian shares now has €2,000 withheld in Brazil before the money ever reaches a Portuguese account. Under Portugal's 28% flat rate, the gross €20,000 generates a €5,600 Portuguese tax liability. Credit the €2,000 already paid to Brazil, and the resident owes a further €3,600 to Finanças — total tax paid, €5,600, unchanged from what it would have been if Brazil had never touched the money. In pure euro terms, the reform is close to tax-neutral for someone who claims the credit properly. The risk is entirely administrative: anyone who fails to document the Brazilian withholding, or misses the credit box on the IRS return, ends up paying close to the full 28% again on top of the 10% already lost — a total tax rate near 34.8%, not 28%.
"Brazil's dividend tax doesn't necessarily cost Brazilian residents in Portugal more — but it does mean two tax authorities now need to agree on the same number," says GrowIN Portugal Editorial.
Practical implications for the 2026 IRS return
Anyone declaring Brazilian dividend income this filing season needs a certificate or statement proving the Brazilian withholding (the DARF payment reference under code 1841, per Brazilian guidance), converted to euros at the correct exchange rate, and reported alongside the gross dividend figure — not just the net amount that actually arrived. Filing only the net figure, or forgetting the credit claim entirely, is the single most common mistake tax advisers are already flagging for this category of taxpayer.
Aggregation (englobamento) adds another layer of choice: opting to tax dividends at progressive rates instead of the 28% flat rate can help lower earners, but the calculation now has to factor in the Brazilian withholding on top of whatever Portuguese bracket applies. Anyone with meaningful Brazilian dividend income should model both scenarios — flat rate with credit, versus aggregation with credit — before filing.
What to watch next
Brazil's Receita Federal has signalled that further regulation is still pending on the refund/credit mechanism for cases where the combined Brazilian tax burden exceeds the 34% corporate ceiling, which could affect how much documentation Brazilian-side taxpayers eventually need to produce. On the Portuguese side, nothing in the fact pattern suggests Finanças will change how the foreign tax credit works — but taxpayers with Brazilian income should keep every remittance advice and DARF receipt from 2026 onward, because Finanças can and does ask for them.
For a fuller walkthrough of how foreign income, tax residency and the IRS filing window fit together for newcomers, see GrowIN's guide hub at tax & NIF. Brazilian residents unsure how to document foreign withholding correctly should get professional advice before the 30 June deadline rather than after a Finanças query lands.