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Brazil has officially ended its tax exemption on small-scale cryptocurrency gains, implementing a flat 17.5% tax rate on all capital gains from digital assets regardless of transaction size. This sweeping change, introduced under Provisional Measure 1303, marks a significant shift in the nation’s approach to taxing the booming crypto market and aims to bolster government revenues amid increasing financial market oversight.
Key Changes in Brazil’s Crypto Tax Landscape
Previously, Brazilian residents enjoyed an exemption on crypto sales of up to 35,000 BRL (approximately USD 6,300) per month. Gains beyond this threshold were taxed progressively between 15% and 22.5%, with the highest rates applying to trades above 30 million BRL. Under the new rules effective June 12, this exemption has been removed, standardizing the tax at a 17.5% flat rate.
This reform could increase tax burdens on retail and smaller investors, while potentially lowering effective rates for high-net-worth individuals whose previous rates ranged from 17.5% to 22.5% on large trades exceeding 5 million BRL.
Expanded Tax Base: Self-Custody and Offshore Crypto
Provisional Measure 1303 also extends the taxable base to crypto assets held in self-custody wallets and offshore accounts, a move reflecting growing concerns about tax evasion and undeclared foreign assets. The tax will be assessed quarterly, with investors permitted to offset losses from the previous five quarters—though this loss deduction window is set to tighten starting in 2026.
Broader Financial Market Tax Reforms
Beyond cryptocurrencies, Brazil’s government has expanded taxation on fixed income instruments such as Agribusiness and Real Estate Credit Letters (LCAs and LCIs) and Receivables Certificates (CRIs and CRAs), imposing a 5% tax on profits. Additionally, taxation on betting revenues has increased from 12% to 18%.
These measures follow a shelved proposal to increase the Financial Transaction Tax (IOF), which faced strong opposition.
Upcoming Regulatory Developments: Crypto Salaries
In a related legislative development, Brazilian lawmakers are considering a bill that would allow partial salary payments in cryptocurrencies, capping such payments at 50% for regular employees. Full payments in crypto would be permitted only for foreign workers or contractors under specific conditions. This move signals a cautious but progressive stance toward integrating crypto into mainstream financial practices.
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