Brazil ends crypto tax break, imposes 17.5% levy on gains

Brazil is taxing cryptocurrency profits at a flat rate, having scrapped the monthly exemption previously granted to small-scale investors.

Starting June 12, a 17.5% capital gains tax applies to all crypto transactions, regardless of the value or volume, as part of Provisional Measure 1303, introduced by the federal government to increase revenue from financial market activities.

Under the new regulations, taxation applies to crypto assets held in self-custody wallets and digital assets stored overseas. Brazilian investors must now declare all gains quarterly, with the ability to offset losses from the previous five quarters. However, this offset window will be reduced from 2026 onward.

Previously, Brazilians could sell up to 35,000 reais (approximately $6,300) worth of crypto per month without paying income tax. Larger transactions activated a tiered tax structure starting at 15% and topping out at 22.5% for those moving over 30 million reais annually.

The flat 17.5% rate now standardizes this burden, reducing the effective rate for high-net-worth investors while increasing it for smaller traders.

This tax overhaul arrives at a time when Brazil, already Latin America’s largest crypto market and ranked among the world’s top 10 in terms of adoption, is actively pursuing broader crypto integration, from regulated salary payments to a proposed sovereign Bitcoin reserve.

In March, lawmakers introduced Bill PL 957/2025 to permit employees to receive part of their salaries in cryptocurrency. At least 50% of wages must still be paid in reals, but expatriates and foreign remote workers may receive full payment in digital assets under Central Bank oversight.

Employers opting for crypto-based payrolls would be required to issue detailed statements and provide educational material on virtual asset use, risks, fraud prevention, and conversion procedures.

Separately, Brazil is advancing Bill PL 4501/2024, which would authorize the allocation of up to 5% of the country’s $370 billion treasury into a Bitcoin strategic reserve. 

The proposal, currently under review in the Chamber of Deputies, seeks to diversify national reserves and position Bitcoin as a sovereign hedge.

If passed, Brazil would become the first G20 nation to formalize Bitcoin into law as a reserve asset through legislative channels rather than executive action.