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By Francisco Rodrigues|Edited by Aoyon Ashraf
Jun 14, 2025, 3:50 p.m.
- Brazil introduced a 17.5% tax on all cryptocurrency profits for individuals, replacing a previous exemption for smaller transactions.
- The tax applies to all cryptocurrency holdings, regardless of location, and allows losses to be offset within a five-quarter window.
- The tax overhaul aims to increase tax revenue after the government abandoned a proposed hike to the IOF financial transaction tax.
Brazil has scrapped a long-standing tax exemption on cryptocurrency gains, with a new provisional measure (MP 1303), 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. Before the change, gains above that were taxed progressively, reaching as high as 22.5% for volumes over $5.4 million.
STORY CONTINUES BELOW
The new rule replaces this system with a flat tax, meaning smaller investors will face higher tax burdens while large holders may see their bills shrink, local news outlet Portal do Bitcoin reports.
The tax will apply regardless of where the assets are held, including in overseas exchanges or self-custodial wallets. Losses can be offset, but only within a rolling five-quarter window, a rule that will become stricter starting in 2026.
The government says the overhaul is aimed at boosting tax revenue after walking back a proposed hike to the IOF financial transaction tax, which had drawn industry and congressional criticism.
Alongside crypto, the new measure affects fixed-income investments and online betting, with the former now incurring a fixed 5% tax on earnings and the latter seeing taxes on operator revenues rise from 12% to 18%.
Francisco is a reporter for CoinDesk with a passion for cryptocurrencies and personal finance. Before joining CoinDesk he worked at major financial and crypto publications. He owns bitcoin, ether, solana, and PAXG above CoinDesk’s $1,000 disclosure threshold.
