Brazil has introduced a new taxation framework for cryptocurrency profits, eliminating the previous exemptions that benefited small-scale investors. Starting June 12, a flat 17.5% capital gains tax is applied to all cryptocurrency transactions, regardless of the transaction volume or value. This change is part of Provisional Measure 1303, a policy introduced by the federal government aimed at increasing revenue from the financial sector.

New Tax Rules for Cryptocurrency Transactions

Under the updated regulations, the tax applies to both crypto assets stored in self-custody wallets and those held on international platforms. Brazilian investors are now required to declare their cryptocurrency gains quarterly. An option to offset losses from the previous five quarters is available, but this offset window will be reduced starting in 2026.

Previously, investors in Brazil enjoyed a tax exemption on cryptocurrency sales of up to 35,000 reais (approximately $6,300) per month. Transactions exceeding this threshold were taxed under a progressive system, with rates starting at 15% and going up to 22.5% for annual trading volumes exceeding 30 million reais. The new flat 17.5% rate standardizes taxation, effectively lowering the burden for high-net-worth individuals while increasing it for smaller traders.

Brazil’s Growing Role in the Global Crypto Market

This tax reform comes as Brazil strengthens its position as a leader in cryptocurrency adoption. As the largest crypto market in Latin America and one of the top 10 globally in adoption, the country is actively integrating digital assets into its financial ecosystem. Initiatives range from regulated salary payments in cryptocurrency to discussions about establishing a sovereign Bitcoin reserve.

Crypto-Based Salary Payments

In March, Brazilian lawmakers proposed Bill PL 957/2025, allowing employees to receive a portion of their salaries in cryptocurrency. While at least 50% of wages must still be paid in the national currency (reals), expatriates and foreign remote workers could opt for full payment in digital assets. This would be regulated under the oversight of the Central Bank of Brazil.

Employers adopting crypto-based payroll systems would be required to provide detailed statements and educational materials covering topics such as the use of virtual assets, associated risks, fraud prevention, and currency conversion procedures. These measures aim to ensure transparency and protect employees from potential risks.

Proposed Bitcoin Strategic Reserve

Additionally, Brazil is advancing Bill PL 4501/2024, which proposes allocating up to 5% of the country’s $370 billion treasury into a Bitcoin strategic reserve. This initiative, currently under review by the Chamber of Deputies, seeks to diversify Brazil’s national reserves and position Bitcoin as a hedge against economic volatility.

If approved, Brazil would become the first G20 nation to formalize Bitcoin as a reserve asset through legislative channels, rather than executive orders. This move could set a significant precedent for other nations exploring similar strategies.

Implications for Crypto Investors

The updated taxation policy and ongoing legislative developments highlight Brazil’s commitment to integrating cryptocurrencies into its financial and regulatory framework. Here’s what crypto investors in Brazil should keep in mind:

  • Quarterly Declarations: Ensure all cryptocurrency gains are declared on a quarterly basis to comply with the new rules.
  • Loss Offsetting: Take advantage of the five-quarter loss offset window while it remains available through 2025.
  • Strategic Planning: Smaller investors may need to reassess their trading strategies to account for the flat 17.5% tax rate.
  • Stay Informed: Monitor legislative developments, including salary payment regulations and the potential Bitcoin reserve, as these could impact the broader crypto market.

Brazil’s proactive approach to cryptocurrency regulation underscores its ambition to lead in this evolving financial landscape. Investors, both domestic and international, should stay informed about these regulatory changes to navigate the market effectively and capitalize on emerging opportunities.

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