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BILL NO. 1,087/2025 – House of Representatives approves bill proposing changes to income tax: exemptions, minimum tax, and dividend taxation
October 13th, 2025
On October 1, 2025, the Brazilian House of Representatives – one of the two houses of the Brazilian Congress – unanimously passed the report of Bill No. 1,087/2025.
With few changes from the original text submitted by the Federal Government, the Bill primarily aims to raise the exemption bracket for Individual Income Tax (IRPF) to BRL 5,000. To compensate for the anticipated loss of revenue, the bill introduces a “minimum high-income tax”, which establishes a minimum IRPF rate on annual income exceeding BRL 600,000, in addition to withholding tax on dividend payments.
The bill must be approved by the Federal Senate and sanctioned by the Brazilian President. The new rules will enter into force in 2026 if approved in 2025.
Demarest’s Tax team has summarized the key points under discussion.
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