The Brazilian government has abolished the Bitcoin tax exemption for small investors and introduced a flat 17.5% tax rate on all crypto capital gains.
Brazil has officially ended the tax-free period for small digital asset investors, introducing a flat 17.5% rate on all profits from cryptocurrency sales. The decision was formalized through Provisional Measure 1303, part of the government’s strategy to increase tax revenues from financial markets.
Until now, Brazilian residents selling up to 35,000 Brazilian reais (around $6,300) in cryptocurrencies per month were completely exempt from income tax. Profits exceeding this threshold were subject to progressive taxation, starting at 15% and reaching up to 22.5% for amounts over 30 million reais.
The new flat rate, which took effect on June 12, removes all exemptions and applies uniformly to every investor, regardless of the size of their transactions, according to local outlet Portal do Bitcoin.
While small-scale investors will now face a higher tax burden, high-net-worth individuals might actually benefit. Under the previous system, large transactions were taxed between 17.5% and 22.5%. With the new flat 17.5% rate, many high-profile investors will see their effective tax liability reduced.
Under the new rules, taxes will be calculated quarterly, with investors allowed to offset losses from the previous five quarters. However, starting in 2026, the time frame for claiming losses will be shortened.
Last March, Brazilian lawmakers also proposed a bill allowing employers to partially pay workers in cryptocurrency. According to the draft, crypto payments could not exceed 50% of an employee’s salary.
Full payment in cryptocurrencies would only be allowed for foreign workers or contractors, and only under specific conditions set by the Brazilian Central Bank. The bill prohibits full crypto payment for standard employees.
