New Brazilian Law Imposes Uniform 17.5% Tax on Cryptocurrency Profits

Brazil Implements 17.5% Flat Tax on Crypto Profits, Ending Longstanding Exemption

In a major shift in its approach to digital asset taxation, Brazil has passed Provisional Measure 1303, introducing a flat 17.5% tax rate on all cryptocurrency gains earned by individuals—regardless of where the assets are held or how much is traded.

The move brings an end to a tax exemption that had allowed individuals to avoid capital gains tax on monthly crypto sales of up to R$35,000 (approximately $6,300). Previously, earnings above that threshold were taxed using a progressive system, with rates ranging from 15% to 22.5% depending on the size of the profit.

Under the new flat structure, smaller investors may face a heavier tax load, while high-volume traders could see lower effective rates. The tax applies to all holdings, including those on international exchanges and in self-custody wallets, signaling Brazil’s intent to tighten oversight of offshore crypto activity.

While capital losses can still be used to offset gains, the deduction window is limited to five consecutive quarters, a rule that will become even stricter starting in 2026, according to Portal do Bitcoin.

The government framed the change as part of a broader strategy to increase tax revenue, following its decision to abandon a planned increase to the IOF (Tax on Financial Operations) amid industry and congressional opposition.

Beyond crypto, MP 1303 also introduces new tax rules for other financial sectors. Fixed-income investments will now be subject to a 5% flat tax, while online betting operators will face a hike in taxes on gross revenue—from 12% to 18%.