Brazil Implements 17.5% Tax on Cryptocurrency Gains, Ending Exemption
Brazil has introduced a 17.5% tax on cryptocurrency profits for individuals through provisional measure MP 1303. Key details include:
- The previous exemption for individual sales up to R$35,000 (approximately $6,300) per month is removed.
- Tax rates for gains above that threshold were previously progressive, with a maximum of 22.5% for amounts over $5.4 million.
- The new flat tax increases the burden on smaller investors while potentially lowering taxes for larger holders.
- The tax applies to assets held in any location, including overseas exchanges and self-custodial wallets.
- Losses can be offset within a five-quarter rolling window; rules will tighten starting in 2026.
- The measure also includes a fixed 5% tax on fixed-income investments and raises online betting operator taxes from 12% to 18%.
The government aims to boost tax revenue following criticism of a proposed increase in the IOF financial transaction tax.