15.06.2025 19:16

Brazil has eliminated tax exemptions for small-scale cryptocurrency transactions, implementing a uniform 17.5% tax on all digital asset capital gains. This significant policy shift, detailed in Provisional Measure 1303, aims to bolster government revenue through increased taxation within the burgeoning financial markets.

Previously, Brazilian cryptocurrency traders enjoyed a tax-free threshold of R$35,000 per month. Profits exceeding this limit, but below R$5 million, were subject to a 15% tax. This tiered system has been replaced by a flat rate, affecting both previously exempted individuals and those who previously benefited from lower tax brackets. The new measure consequently introduces taxation for a larger segment of the population, impacting those who previously operated below the exemption threshold.

This change in taxation policy creates a more equitable system for all crypto traders, regardless of trading volume, eliminating previous discrepancies. Ironically, while the smaller traders face increased tax burdens, some high-volume investors might experience a reduction in their tax obligations compared to the previous progressive tax structure. The former tiered system, with rates reaching 22% for trades above R$30 million, has been superseded by the flat 17.5% rate.

Furthermore, the government's expansion of the tax net now encompasses self-custody and foreign-held crypto assets. This comprehensive approach signals a concerted effort to maximize tax revenue from all aspects of the cryptocurrency market within Brazil, potentially impacting both individual investors and larger market players in unforeseen ways. The long-standing exemptions for fixed income gains have also been removed, with a new 5% tax rate now in effect.