Brazil removes tax breaks for crypto profits and applies a flat 17.5% tax starting June 12.
- A flat 17.5% tax now applies to all crypto gains in Brazil.
- Small investors lose exemptions; large investors may save.
- Foreign and self-custody crypto assets are now taxable.
New Tax Rule Starts June 12
On June 12, Brazil introduced a new tax rule for crypto investments. The rule sets a flat 17.5% tax on all profits from digital assets. It applies to everyone, no matter how much is being traded or earned.
This change came through Provisional Measure 1303 as part of the government’s effort to increase tax revenue from financial markets.
What Changed for Investors
Before the change, Brazilian investors could sell up to 35,000 reals (about $6,300) in crypto per month without paying any tax. If they earned more, they paid a progressive tax rate starting at 15%, which could go up to 22.5% for gains over 30 million reals.
Now, all investors pay the same 17.5% tax, no matter the size of the transaction. This impacts small investors most, since they lose their previous exemption.
Big Investors Could Benefit
Under the old system, investors making big trades paid up to 22.5% in taxes. With the new flat rate, their tax liability drops to 17.5%. This means some wealthy traders may end up paying less overall.
Self-Custody and Foreign Crypto Now Taxed
The new rule also targets crypto held outside of exchanges. This includes self-custody wallets and assets stored overseas. These holdings are now included in tax assessments.
Taxes will be calculated every three months. Investors can subtract losses from the last five quarters to lower what they owe. In 2026, that time period will shrink.
More Financial Changes in Brazil
Taxes are also being added to other areas. Investment products like LCAs and LCIs will now have a 5% tax on profits. The same goes for CRIs and CRAs. Betting revenue taxes went up from 12% to 18%.
These changes come after the government backed down on raising the Financial Transaction Tax (IOF) due to public and political opposition.
Source: cointelegraph.com