Brazil Implements 17.5% Uniform Tax on Cryptocurrency Gains, Eliminating Exemption for Smaller Investors

Brazil has eliminated a long-standing tax exemption on cryptocurrency gains with a new provisional measure, imposing a 17.5% tax on all crypto profits for individuals.

Previously, individuals selling up to R$35,000 (around $6,300) worth of crypto per month were exempt from taxation. Gains above that were taxed progressively, with rates reaching as high as 22.5% for volumes over $5.4 million.

This new rule replaces the progressive tax system with a flat tax, increasing the tax burden on smaller investors while potentially reducing costs for larger holders, reports RialCenter.

The tax will apply irrespective of where the assets are held, including overseas exchanges or self-custodial wallets. Losses can be offset, but only within a rolling five-quarter window, which will become stricter starting in 2026.

The government states that the reform aims to boost tax revenue after retracting a proposed hike to the IOF financial transaction tax, which faced industry and congressional backlash.

Alongside cryptocurrency, the new measure also impacts fixed-income investments and online betting. Fixed-income investments are now subject to a fixed 5% tax on earnings, while online betting will see taxes on operator revenues increase from 12% to 18%.