Brazil ends a crypto tax break, imposing a 17.5% flat rate

Brazil ends tax exclusion for small crypto revenues, introducing a 17.5% flat rate to all capitals from digital properties. The new rule was announced under the temporary 1303 proposal as part of the government’s push to raise revenue by taxing the financial market.

To this day, Brazil residents who sell up to 35,000 Brazil Reals (approximately $ 6,300) in crypto assets per month have no income tax fee. The gains beyond that are taxed over and over again, starting at 15% and reaching as high as 22.5% for volumes of more than 30 million Brazil’s reality.

The new flat rate, which has taken place since June 12, removed all exceptions and equally applicable to all investors regardless of the size of their transactions, According to In a report by the local news outlet portal do bitcoin.

While smaller investors will now face higher tax burdens, high -net individuals may end payment less. Under the previous system, large goods, more than 5 million Real Reals of Brazil, were taxed between 17.5% and 22.5%. With an equal 17.5% rate today, many large investors will see their effective tax rate decrease.

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Brazil targets self-custody and offshore crypto

The temporary proposal also expands the tax base. Crypto properties held on self-custody wallets and foreign crypto holdings are now included in the tax regime.

Each report, taxation will be reviewed quarterly, allowing investors to turn off losses from the past five quarters. However, from 2026 forward, the window for a reduction in loss is tight.

Overhaul extends beyond the crypto. Fixed income instruments, previously exempt from income tax, such as Agribusiness and Real Estate Credit Letter (LCAS and LCIS), as well as real estate and agribusiness certificates of certificates (Cris and CRA), will now have a 5% income tax.

Meanwhile, taxing earnings increased from 12% to 18%.

The Ministry of Finance introduced these changes following the backlash in a previous attempt to walk tax on financial transaction (IOF). That proposal was recorded after facing a tough opposition from both the market and Congress.

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Brazil’s condolences that allowed Bitcoin salary payments

In March, lawmakers in Brazil passed Pay workers partially with cryptocurrencies Like Bitcoin (Btc). Under the suggested policies, crypto payments cannot exceed 50% of an employee’s salary.

The full crypto payment will only be allowed for foreign workers or contractors and only under the specific conditions laid out by the central Brazil bank. The bill prohibits paying wages to digital assets for standard employees.