Brazil Ends Crypto Tax Break
Brazil Imposes 17.5% Flat Tax on Crypto Gains
Brazil has eliminated the tax exemption for small-scale cryptocurrency profits, introducing a 17.5% flat tax on all capital gains from digital assets. This change, enacted under Provisional Measure 1303, aims to boost government revenue from financial market taxation.
Previously, Brazilians selling up to 35,000 Brazilian reals (approximately $6,300) in crypto per month were exempt. Profits exceeding this threshold were taxed progressively, ranging from 15% to 22.5% for amounts above 30 million Brazilian reals.
Effective June 12th, the new flat rate applies to all investors regardless of transaction size. While smaller investors will face higher taxes, high-net-worth individuals may see a reduction, as the previous system taxed large trades (over 5 million Brazilian reals) at 17.5%–22.5%.
Expanded Tax Base Targets Self-Custody and Offshore Crypto
The measure broadens the tax net to include crypto held in self-custody wallets and foreign crypto holdings. Taxation will be assessed quarterly, with investors able to offset losses from the previous five quarters (reduced to a shorter timeframe from 2026).
This overhaul extends beyond crypto. Previously exempt fixed-income instruments, such as Agribusiness and Real Estate Credit Letters (LCAs and LCIs), and Real Estate and Agribusiness Receivables Certificates (CRIs and CRAs), will now be subject to a 5% tax on profits. Betting revenue taxes have also increased from 12% to 18%.
These changes follow the government's withdrawal of a proposed Financial Transaction Tax (IOF) increase after facing strong market and congressional opposition.
Bitcoin Salary Payments Under Consideration
Separately, a proposed bill allows employers to pay employees partially in cryptocurrencies like Bitcoin (BTC), with a maximum of 50% of salary in crypto. Full crypto payments would be limited to foreign workers and contractors under specific conditions set by the central bank.
Independent contractors could receive full crypto payment, provided contractual agreement and use of official exchange rates from Central Bank-authorized institutions. Learn more about the details of the proposed bill here.
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