Brazil has introduced a new tax rule for cryptocurrency gains, ending the previous exemption for small-scale profits and implementing a flat 17.5% tax rate on all capital gains from digital assets.
The new rule, announced under Provisional Measure 1303, is part of the government’s effort to increase revenue through financial market taxation. Prior to this change, Brazilian residents who sold up to 35,000 Brazilian reals (approximately $6,300) in crypto assets per month were exempt from income tax. Gains exceeding this threshold were taxed progressively, starting at 15% and reaching 22.5% for volumes above 30 million Brazilian reals.
The new 17.5% flat rate, which took effect on June 12, eliminates all exemptions and applies uniformly to all investors, regardless of transaction size, according to a report by Portal do Bitcoin. This change may result in smaller investors facing higher tax burdens, while high-net-worth individuals could potentially pay less. Under the previous system, large trades exceeding 5 million Brazilian reals were taxed between 17.5% and 22.5%. The uniform 17.5% rate means many large investors will experience a reduction in their effective tax rate.
Provisional Measure 1303 also broadens the tax base to include crypto assets held in self-custody wallets and foreign crypto holdings. Taxation will be assessed quarterly, allowing investors to offset losses from the previous five quarters. However, starting in 2026, the window for loss deduction will be tightened.
The tax overhaul extends beyond cryptocurrencies. Fixed income instruments, previously exempt from income tax, will now incur a 5% tax on profits. These include Agribusiness and Real Estate Credit Letters (LCAs and LCIs), as well as Real Estate and Agribusiness Receivables Certificates (CRIs and CRAs). Additionally, the taxation on betting revenue has increased from 12% to 18%.
These changes were introduced after backlash against an earlier proposal to increase the Financial Transaction Tax (IOF). The proposal was ultimately shelved due to strong opposition from both the market and Congress.
In a related development, Brazilian lawmakers proposed in March 2025 allowing employers to pay workers partially in cryptocurrencies such as Bitcoin (BTC). According to the proposal, crypto payments could not exceed 50% of an employee’s salary. Full crypto payments would only be permitted for foreign workers or contractors under specific conditions set by Brazil’s central bank. The bill prohibits paying standard employees’ wages entirely in digital assets.
The legislation would also allow independent contractors to receive full payment in crypto if contractually agreed upon. All crypto payouts must use official exchange rates from Central Bank-authorized institutions.
