Brazil Imposes 17.5% Flat Tax on Crypto Gains, Ending Long-Standing Exemption

Brazil has officially eliminated its long-standing tax exemption on cryptocurrency gains with the introduction of Provisional Measure 1303. Under the new rule, all crypto profits for individuals will now be subject to a flat 17.5% tax, regardless of transaction size or holding location. This marks a significant shift from the previous system, where gains were only taxed if monthly sales exceeded R$35,000 (around $6,300), with rates ranging up to 22.5% for high-volume investors.

The new flat tax regime, reported by Portal do Bitcoin, is expected to impact smaller investors more heavily, as they will now face a steeper tax burden compared to the previous exemption. Conversely, larger crypto holders may benefit from lower tax liabilities under the simplified system.

Importantly, the 17.5% tax applies universally—whether assets are stored on domestic platforms, foreign exchanges, or in self-custodial wallets. Investors can offset crypto losses, but only within a rolling five-quarter period. This loss-offsetting provision will become more restrictive beginning in 2026.

The Brazilian government says the overhaul is part of a broader effort to increase public revenue after retreating from a controversial IOF financial transaction tax hike. In addition to cryptocurrencies, the new tax measure also affects other sectors: fixed-income earnings are now taxed at a flat 5%, while online betting operator revenues will see tax rates rise from 12% to 18%.

This tax reform reflects Brazil’s growing focus on regulating digital assets and enhancing transparency in financial markets. As crypto adoption continues to expand, the government appears committed to ensuring digital profits are subject to standardized tax treatment across all platforms and jurisdictions.