Brazil has officially scrapped its crypto tax exemption for small traders and introduced a flat 17.5% capital gains tax on all digital asset transactions. Effective June 12, 2025, the new law under Provisional Measure 1303 applies to every investor—regardless of portfolio size or platform—impacting trades, DeFi, staking, and even self-custody wallets.

Key Changes Under Brazil’s New Crypto Tax Law

Previously, Brazilian investors enjoyed a R$35,000 monthly exemption on crypto sales, and capital gains were taxed progressively—ranging from 15% for profits under R$5 million to 22.5% for higher amounts. Now, the system has shifted to a uniform 17.5% rate for all crypto capital gains, regardless of volume or source.

This adjustment significantly alters the landscape for small-scale traders, casual users, and freelancers who were previously exempt. Every gain, no matter how small, is now taxable. On the flip side, high-net-worth individuals could benefit from the reform, as their former tax obligations of up to 22.5% are now capped.

The law also targets previously underregulated areas, including offshore wallets, DeFi earnings, NFT sales, and staking rewards. Transactions from decentralized protocols or cold storage wallets are now within the scope of Brazilian tax enforcement.

Additionally, crypto capital gains must be reported quarterly. Losses can be carried forward but only for up to five quarters—and starting in 2026, this grace period will shrink. Fixed-income products, such as LCIs and LCAs, are now taxed at 5%, and online betting revenues have seen a tax hike from 12% to 18%.

How Crypto Investors in Brazil Can Adapt

To stay compliant, investors should start tracking all transactions across centralized exchanges, DeFi platforms, and NFT marketplaces. Using crypto tax tools and maintaining precise records will be crucial for quarterly filings. Strategic planning is essential—especially for active traders—since every taxable event now carries a clear cost.

Ultimately, Brazil’s flat-rate crypto tax simplifies the system but demands greater diligence. For small investors, it marks the end of an era of leniency. For others, it’s a call to optimize strategies and embrace transparency in the evolving digital economy.

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