Thomas Daniels
Brazil has enacted sweeping changes to its cryptocurrency tax policy, abolishing exemptions for small-scale traders and imposing a flat 17.5% tax on all capital gains derived from digital assets. The measure, implemented under Provisional Measure 1303, reflects the government’s broader strategy to increase tax revenues from financial markets.
Previously, Brazilian residents could sell up to 35,000 Brazilian reals (approximately $6,300 USD) in cryptocurrency each month without incurring income tax. Gains exceeding this threshold were subject to a progressive tax rate, starting at 15% and escalating to 22.5% for profits exceeding 30 million reals.
The new uniform rate, effective as of June 12, eliminates all such exemptions and applies universally to investors regardless of transaction volume. According to Portal do Bitcoin, this shift will likely increase the tax burden for retail investors, while high-net-worth individuals may benefit. Under the former system, large-scale transactions exceeding 5 million reals faced tax rates between 17.5% and 22.5%. The new flat rate could effectively reduce tax liabilities for some of Brazil’s wealthiest crypto holders.
Expanded Scope: Self-Custody and Offshore Holdings Included
In a significant policy expansion, the new tax regime encompasses crypto assets held in self-custody wallets and foreign crypto accounts. Quarterly tax assessments will allow investors to offset losses accrued over the previous five quarters. However, starting in 2026, the window for applying such losses will narrow, limiting loss deductions further.
Broader Financial Market Tax Overhaul
The reforms extend beyond digital currencies. Several previously tax-exempt fixed income instruments—such as Agribusiness and Real Estate Credit Letters (LCAs and LCIs), along with Real Estate and Agribusiness Receivables Certificates (CRIs and CRAs)—will now face a 5% tax on profits. Additionally, taxation on betting revenues has risen from 12% to 18%.
The Finance Ministry introduced these adjustments after strong political and market resistance derailed an earlier proposal to increase the Financial Transaction Tax (IOF). The revised measures reflect a compromise aimed at enhancing fiscal stability without provoking further legislative pushback.
Lawmakers Explore Bitcoin Salary Payments
Separately, Brazilian lawmakers are evaluating legislation that would authorize partial salary payments in cryptocurrency. Under the proposal introduced in March, employers could pay up to 50% of an employee’s salary in digital assets such as Bitcoin (BTC), which recently traded at approximately $104,929.
Full salary payments in cryptocurrency would be restricted to foreign workers or independent contractors under specific conditions set by Brazil’s Central Bank. In all cases, cryptocurrency transactions must reference official exchange rates from institutions authorized by the Central Bank.
The legislation underscores Brazil’s ongoing efforts to integrate digital currencies into its formal economy while maintaining strict regulatory oversight.
