Brazil Reshapes Crypto Tax Policy With 17.5% Flat Rate, Tightening Rules for Retail Investors
Brazil has introduced a significant revision to its crypto taxation framework, replacing its tiered structure with a flat 17.5% tax on all personal gains from digital assets. The change, formalized under Provisional Measure 1303, eliminates the long-standing exemption for individuals trading under R$35,000 (approx. $6,300) per month.
Previously, capital gains above that threshold were taxed progressively, peaking at 22.5% for high-net-worth individuals. Under the new rule, retail investors will likely face a heavier effective tax rate, while wealthier holders could see modest relief.
Importantly, the measure applies to crypto assets held both domestically and abroad, including funds on foreign exchanges and self-custodied wallets, signaling increased enforcement reach. Losses can still be offset, but the government is limiting carry-forward eligibility to a rolling five-quarter window, a restriction that will tighten further beginning in 2026.
Officials say the move is aimed at improving tax collection efficiency after shelving a proposed increase to the IOF transaction tax, which had faced criticism from both lawmakers and financial industry stakeholders.
Beyond crypto, the measure also affects other sectors: fixed-income products now incur a flat 5% tax, and online betting operators will see their revenue tax jump from 12% to 18%—a clear signal of Brazil’s broader push to standardize taxation across emerging digital economies.
For investors, the new structure simplifies compliance but could raise effective costs for casual traders, making tax planning and asset location strategies increasingly important.
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