On June 12, 2025, Brazil implemented a new cryptocurrency tax law under Provisional Measure 1303, establishing a flat 17.5% tax on all capital gains. This replaces a previous progressive tax model, eliminating the exemption for monthly sales up to 35,000 Brazilian reais (approximately $6,300). The new tax applies to assets held in any form, including offshore accounts and decentralized platforms like DeFi and NFTs. Small investors, who previously benefited from the exemption, will now incur taxes even on modest profits. Medium-scale investors face a slight tax increase, moving from a manageable 15% to 17.5%, while high-net-worth individuals could benefit from the flat rate cap, previously set at 22.5%. The new framework also taxes fixed-income investments and introduces a 5% tax on traditional bonds. Brazil's tax rate is moderate compared to other nations, such as India and Japan, which impose much higher rates. Stricter reporting and on-chain monitoring are expected, alongside an impending reduction in the loss-carryover period. Overall, this reform aims to broaden Brazil’s tax base amid a rising fiscal burden, while encouraging market stability and compliance.

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