Brazil has made changes to tax legislation by abolishing tax exemptions on small crypto profits and introducing a uniform 17.5% tax rate.
New Tax Regulations for Cryptocurrencies
As of June 12, 2025, Brazil will impose a 17.5% tax on all capital gains from crypto assets. Previously, profits from the sale of up to 35,000 Brazilian Reais (approximately $6,300) per month were exempt from income tax, with higher amounts taxed progressively from 15% to 22.5%. The new rule applies to all investors, regardless of transaction sizes.
Extension of the Tax Base
The new rules also cover crypto assets held in self-custody wallets and foreign crypto holdings. Taxation will occur quarterly, and investors can offset losses from the previous five quarters. However, starting in 2026, the ability to deduct losses will be tightened.
Proposals for Salary Payments in Cryptocurrency
In March, Brazilian lawmakers proposed legislation allowing partial salary payments in cryptocurrencies such as Bitcoin. Under the proposed rules, crypto payments cannot exceed 50% of an employee's salary. Full crypto payments would be allowed only for foreign workers or contractors under specific contractual agreements.
The abolition of tax exemptions and the introduction of a new tax rate reflects the Brazilian government's commitment to increasing revenue through financial market taxation and adapting to the evolving landscape of cryptocurrencies.
