- Brazil imposes a 17.5% flat tax on all crypto capital gains, ending previous exemptions.
- New rules apply to self-custodied and offshore crypto, with quarterly tax reporting.
- Lawmakers propose Bitcoin reserves and crypto-based payroll for foreign workers.
Brazil has eliminated its long-standing tax break on cryptocurrency profits, introducing a flat 17.5% capital gains tax on all digital asset transactions. The measure, enacted through Provisional Measure 1303, took effect on June 12 and marks a significant shift in the country’s approach to crypto taxation.
Previously, Brazilian taxpayers were exempt from capital gains tax on crypto sales totalling up to 35,000 Brazilian reais (approximately $6,300) per month. Gains exceeding this value were taxed progressively, with rates ranging from 15% to 22.5%, depending on the volume of the transactions. This structure allowed smaller investors to operate tax-free and subjected large-scale traders to higher tax rates.
Related: BRL1 Stablecoin to Launch in Brazil, Backed by Reais and Bonds
New Flat Tax Hits Small Investors, May Benefit Large Traders
Under the new regulation, all capital gains from digital assets, regardless of the amount or transaction size, will now be taxed uniformly at 17.5%. While smaller investors will face a new financial burden, some high-volume traders could benefit from a reduced effective rate. For example, trades previously taxed at up to 22.5% will now fall under the fixed 17.5% levy.
The legislation alters the tax rate and broadens the tax base. The flat-rate policy now applies to digital assets held in self-custody wallets and those stored abroad. Taxes will be calculated quarterly, and investors may offset losses from gains recorded in the previous five quarters. However, this loss-carryforward period will be reduced beginning in 2026.
Pro-Bitcoin Legislation Also Under Review in Congress
In contrast to the new tax measure, Brazil’s legislature is also reviewing several crypto-related bills with a more positive slant. One such proposal, PL 4501/2024, would allow the government to allocate up to 5% of the country’s $370 billion national treasury to Bitcoin. If passed, it would establish Brazil as the first G20 nation to integrate Bitcoin into its sovereign reserves through legislative means legally.
Related: Brazil’s Crypto Soars on 42% Stablecoin Growth And Institutional Influx
In a separate legislative development, Bill PL 957/2025 seeks to authorize partial salary payments in cryptocurrency. The bill stipulates that domestic employees must receive at least half their salary in reals, while foreign workers and expatriates may receive full compensation in digital assets. Employers using crypto-based payrolls would be required to disclose payment details and provide educational materials on asset use, fraud risks, and conversion processes.
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