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What Changes in Practice

With the extension, companies now have additional time to: • complete year‑end closing for fiscal year 2025;
• prepare and, where applicable, audit financial statements;
• convene general shareholders’ meetings or quotaholders’ meetings;
• formally resolve on the distribution of profits and dividends.

Approvals completed by January 31, 2026 remain covered by the IR exemption (IR — Individual Income Tax in Brazil). After that date, amounts may be taxed under the rules introduced by Law No. 15,270/2025.

Provisional Ruling and a Cautionary Outlook

Despite the operational relief, the measure is provisional and will be submitted to the STF Plenary in a virtual session scheduled for February 13–24, 2026. If the injunction is not confirmed, there could be significant tax impacts for distributions approved after December 31, 2025.

Given this context, companies should exercise heightened care with corporate governance, proper formalization of corporate acts, and tax planning, especially considering the risk of future challenges by the Brazilian Federal Revenue Service (Receita Federal — Brazil’s federal tax authority).

Governance, Compliance, and Risk Mitigation

In light of residual legal uncertainty, a prudent posture is recommended, including: • approving resolutions as early as feasible;
• promptly filing minutes with the Boards of Trade (state commercial registries in Brazil);
• maintaining robust documentation of corporate decisions;
• reviewing internal compliance and risk‑management policies.

The STF’s decision once again underscores the importance of strategic legal action that aligns regulatory compliance, operational efficiency, and asset protection amid an evolving tax landscape.