Brazil Ends Cryptocurrency Tax Exemption
17 Jun, 2025 ● Crypto News
Brazil has eliminated the tax exemption for small-scale crypto profits and introduced a flat 17.5% tax on all capital gains from digital assets. The change, outlined in Provisional Measure 1303, is part of the government’s effort to boost revenue through financial market taxation.
Previously, Brazilian residents were exempt from income tax on monthly crypto sales under 35,000 reals (about $6,300). Profits above that were taxed progressively, with rates starting at 15% and reaching 22.5% for gains over 30 million reals. The new rule, which took effect on June 12, applies the same 17.5% rate to all investors, regardless of transaction size, as reported by Portal do Bitcoin.
While the change raises the tax burden for smaller investors, it may benefit wealthier ones. Under the prior system, trades above 5 million reals were taxed between 17.5% and 22.5%. Now, with a flat rate of 17.5%, large investors could see a lower effective tax rate.
The measure also broadens the scope of taxable assets to include those held in self-custody wallets and offshore accounts. Taxes will be assessed quarterly, and investors can offset losses from the previous five quarters—though this window will be reduced beginning in 2026.
The reforms affect more than just crypto. Fixed-income instruments such as LCAs, LCIs, CRIs, and CRAs—once tax-exempt—will now face a 5% tax on profits. Betting revenue will also be taxed at a higher rate, increasing from 12% to 18%.
These changes follow pushback against an earlier attempt to raise the Financial Transaction Tax (IOF), which was ultimately scrapped due to resistance from the market and Congress.
In March, lawmakers introduced a proposal allowing employers to pay up to 50% of salaries in cryptocurrencies like Bitcoin. Full crypto payments would be restricted to foreign workers or independent contractors under specific conditions set by the central bank.
All payments must use exchange rates from institutions authorized by the Central Bank.
Sources:
https://cointelegraph.com/news/brazil-ends-crypto-tax-exemption-imposes-flat-17-5-rate
