Brazil has introduced a sweeping change to its crypto taxation framework by eliminating the previous exemption for small-scale investors. They however replaced it with a flat 17.5% capital gains tax on all cryptocurrency profits.Â
Effective June 12 under Provisional Measure 1303, the new regulation applies to all crypto transactions, regardless of the amount or frequency, marking a major shift in the country’s fiscal policy on digital assets.
Previously, Brazilians could sell up to 35,000 reais (approximately $6,300) monthly without triggering tax obligations.
Above that threshold, a tiered tax structure ranging from 15% to 22.5% applied. The new flat rate simplifies tax reporting for high-net-worth individuals but raises the burden for smaller traders and retail investors.
Broader Scope Includes Self-Custodied and Foreign-Held Crypto Assets
The new tax regulation expands its reach beyond locally-held exchange accounts to encompass crypto assets held in self-custody wallets and digital assets stored overseas.
Investors are now required to declare capital gains quarterly instead of annually, aligning tax obligations more closely with real-time trading activity.
Importantly, taxpayers may offset losses from the previous five quarters, but that lookback period will shrink starting in 2026.
These changes reflect the federal government’s intent to increase transparency and revenue collection in a rapidly growing segment of Brazil’s financial market.
The enforcement of quarterly declarations also signals a push for more consistent oversight and data on crypto-related earnings.
Also Read: Brazil’s Central Bank Unveils Stringent Regulations on Cross-Border Stablecoin Transactions
Regulatory Push Coincides With Bold Crypto Integration Measures
This tax overhaul comes as Brazil simultaneously pushes for broader crypto integration across the economy.
In March, lawmakers introduced Bill PL 957/2025, which proposes allowing employees to receive a portion of their salaries in cryptocurrency.
The bill requires that at least 49.9% of wages remain paid in Brazilian reals but provides room for foreign workers and expatriates to be compensated entirely in digital assets under Central Bank regulation.
Employers offering crypto-based payroll options would be obligated to issue formal statements and provide comprehensive educational material.
The educational materials constitute virtual asset usage, associated risks, anti-fraud measures, and currency conversion processes. These measures aim to protect users while encouraging adoption in a regulated environment.
Brazil Eyes Bitcoin as Strategic National Reserve Asset
In a separate but related development, Brazil is also considering a groundbreaking proposal to allocate part of its sovereign reserves to Bitcoin.
Bill PL 4501/2024, currently under review in the Chamber of Deputies, would authorize the allocation of up to 5% of Brazil’s $370 billion treasury into a strategic Bitcoin reserve.
The initiative is intended to diversify national reserves and provide a hedge against economic volatility.
If passed, Brazil would become the first G20 country to codify Bitcoin into law as a sovereign reserve asset via legislative means, not executive orders.
Taken together with the new tax measures and salary payment reforms, Brazil is positioning itself as a global leader in integrating cryptocurrency into both fiscal policy and national financial infrastructure.
Also Read: Brazilian Court Grants Judges Authority to Seize Crypto via Exchanges for Debt Collection