- Brazil has replaced its crypto tax exemption with a 17.5% flat tax on all digital asset capital gains.
- The new policy includes self-custody and offshore crypto holdings, expanding the tax base significantly.
- High-net-worth investors may pay less tax under the flat rate compared to the previous progressive system.
Brazil has removed its long-standing crypto tax exemption, replacing the tiered system with a 17.5% flat tax on all digital asset gains. According to a local report , the updated rule, introduced through Provisional Measure 1303, applies to both domestic and offshore holdings, including self-custody wallets. The change went into effect on June 12 as part of a broader government initiative to increase revenue from financial markets.
Crypto Tax Exemption Threshold Removed
Previously, Brazilians could sell up to 35,000 reals in crypto each month without paying taxes. Gains above that were taxed progressively, ranging from 15% to 22.5% depending on the value. That exemption no longer applies. All capital gains from digital assets are now taxed at a fixed 17.5% rate, regardless of the size or frequency of trades.
Under the new rule, investors will be taxed quarterly. Losses may be carried forward for up to five quarters. Starting in 2026, the window for claiming such deductions will be shortened. The new policy removes any distinction between casual traders and high-volume investors, affecting all market participants equally.
High-Net-Worth Investors May See Tax Cuts
The uniform tax rate could reduce tax liability for some wealthy traders. Under the old structure, gains from trades above 5 million reals were taxed at 17.5% to 22.5%. The 17.5% flat rate now places an effective cap on taxation. While smaller traders face higher rates, larger investors may benefit under the new setup.
The measure expands the tax base by including crypto assets stored in self-custody wallets and held in foreign accounts. All holdings, regardless of location or storage method, now fall under the same tax framework. The move aims to reduce loopholes and increase visibility over decentralized and offshore crypto activity.
Other Financial Instruments and Betting Also Targeted
The tax overhaul extends beyond crypto . Fixed income products that were previously tax-exempt, such as Real Estate Credit Letters (LCIs), Agribusiness Credit Letters (LCAs), and Real Estate Receivables Certificates (CRIs), are now subject to a 5% tax on profits. In addition, the government raised taxes on betting revenue from 12% to 18%.
The finance ministry implemented the changes after abandoning a separate plan to raise the Financial Transaction Tax (IOF), which faced resistance from Congress and market stakeholders. Lawmakers are reviewing a bill that would allow partial crypto wage payments. Under the proposal, workers could receive up to 50% of their salary in digital assets. Full crypto compensation would only be permitted for foreign employees or independent contractors. All payments must use official exchange rates verified by the central bank.
