Brazil has eliminated a long-standing tax exemption on gains from cryptocurrencies through a new provisional measure (MP 1303). The measure brings a 17.5% tax on all profits from cryptocurrencies for individual investors.

Previously, individuals selling up to R$35,000 (approximately $6,300) worth of crypto per month were exempt from tax. This changed now as gains over that threshold were progressively taxed, reaching up to 22.5% for amounts exceeding $5.4 million.

Key Points

• The new flat tax is imposed regardless of where the assets are held, even in foreign exchanges or self-custodial wallets.
• Losses can be offset only within a rolling five-quarter window, with stricter rules starting in 2026.
• This overhaul is positioned to boost tax revenue after the government opted against a proposed increase to the IOF financial transaction tax, which faced criticism from the industry and Congress.

Additionally, this measure impacts other investments, where fixed-income gains will now incur a 5% tax, and online betting will see operator revenue taxes hike from 12% to 18%.