Brazil Has Removed Long-Standing Cryptocurrency Tax Exemption with New 17.5% Flat Rate
In a significant shift for Brazil’s crypto landscape, the government has eliminated a longtime tax exemption on cryptocurrency gains. Under the new provisional measure (MP 1303), individuals will now face a flat 17.5% tax on all crypto profits, marking a major change from previous regulations.
Previously, residents could sell up to R$35,000 (roughly $6,300) worth of crypto each month without paying taxes. Gains exceeding this threshold were taxed progressively, with rates climbing as high as 22.5% for volumes over $5.4 million. The new rule replaces this tiered system with a straightforward flat tax, which could mean smaller investors pay more while large holders might benefit from lower taxes.
This tax applies regardless of where the assets are stored—be it overseas exchanges or self-custodial wallets. While losses can be used to offset gains, they are limited to a rolling five-quarter window, a rule that will tighten starting in 2026.
The government says this overhaul aims to increase tax revenue, especially after pulling back from plans to raise the IOF financial transaction tax, which faced criticism from industry players and Congress.
In addition to crypto, the new measure impacts fixed-income investments and online betting. Fixed-income earnings will now be taxed at a fixed rate of 5%, while taxes on operator revenues in online betting will rise from 12% to 18%.
This new crypto tax framework signals a pivotal moment for Brazil’s digital asset ecosystem, aligning the country with global trends toward clearer taxation policies. Investors and industry insiders are watching closely as these changes take effect, shaping the future of cryptocurrency trading and investment in Brazil.
