Brazil has made a major change to its cryptocurrency tax rules. The government has ended the tax exemption that allowed small investors to trade crypto without paying taxes. Since June 12, 2025, all crypto profits will be taxed at a flat rate of 17.5%. This move affects everyone from casual traders to large investors.
What Changed?
Before: Tax-Free Crypto Sales Up to R$35,000
Until now, Brazilian residents could sell up to 35,000 Brazilian reals (about $6,300) worth of cryptocurrency each month without paying any taxes. This exemption helped small investors avoid tax on modest crypto gains.
After: Flat 17.5% Tax on All Crypto Gains
The exemption is now gone. All crypto profits, no matter the amount, are taxed at a flat 17.5%. This replaces the previous system where gains above the exemption were taxed progressively between 15% and 22.5%.
Who Is Affected?
| Investor Type | Previous Tax Rule | New Tax Rule | Impact |
| Small Investors | Tax-free up to R$35,000/month | 17.5% tax on all gains | Pays more tax now |
| Medium Investors | Progressive tax starting at 15% | 17.5% flat tax | Slight increase or stable |
| Large Investors | Up to 22.5% on large trades | 17.5% flat tax | Possible tax savings |
Small investors will feel the biggest impact, paying taxes where they previously did not. Large investors might benefit from the flat rate, which is lower than the previous top rate.
Broader Tax Changes
The crypto tax update is part of a larger financial reform:
- Fixed Income Tax: Profits from fixed income products like Agribusiness and Real Estate Credit Letters will now be taxed at 5%, ending their exemption.
- Betting Tax: Taxes on betting operator revenues increased from 12% to 18%.
- Financial Transaction Tax (IOF): A proposed increase was dropped after opposition, but the government pushed forward with other tax reforms.
What’s Next?
In March 2025, a bill was introduced to allow employers to pay part of workers’ salaries in cryptocurrencies like Bitcoin. This shows Brazil’s interest in integrating crypto deeper into the economy.
The new tax rules aim to bring cryptocurrency trading into the formal tax system and increase government revenue from the growing digital asset market.
Key Takeaways
- Brazil removed the tax exemption on crypto sales under R$35,000 per month.
- A flat 17.5% tax now applies to all crypto gains, regardless of amount or wallet type.
- Small investors face higher taxes; large investors might pay less.
- The tax changes are part of broader financial market reforms.
FAQs
Q: When did the new crypto tax start?
- A: June 12, 2025.
Q: What was the old exemption limit?
- A: R$35,000 (~$6,300) per month.
Q: Are offshore crypto holdings taxed?
- A: Yes, all crypto holdings are included.
Q: Can losses be offset?
- A: Yes, within a five-quarter window, which tightens in 2026.
Q: Do large traders benefit?
- A: Possibly, due to the flat 17.5% rate replacing higher rates.
Brazil’s tax policy shift signals a new era for crypto investors. It challenges small traders to rethink their strategies and pushes the market toward greater regulation.
Are you ready for the change?
