Brazil has enacted a significant change in its crypto taxation policy, abolishing the longstanding tax exemptions for small-scale crypto investors. Effective from June 12, 2025, all profits from digital asset transactions will be subject to a capital gains tax of 17.5%.

This policy shift aims to enhance government revenue from financial markets as part of Provisional Measure 1303.

🇧🇷 Brazil hits retail crypto investors: tax exemptions scrapped, flat 17.5% tax introduced
Brazil has eliminated tax exemptions for small crypto investors, introducing a flat 17.5% tax on all capital gains. The measure is part of the government’s plan to increase revenue from… pic.twitter.com/gUJ4K1k40w
— Atlas21 (@Atlas21_news) June 16, 2025

According to local news reports, “The Brazilian government will eliminate the exemption on profits of up to R$35,000 obtained with cryptocurrencies and will set the tax at 17.5%, to be paid in Income Tax. The new rule is part of a government initiative aimed at increasing tax revenue from financial investments.”

Brazil Ends Monthly Exemption

The previously available exemption allowing Brazilians to sell up to 35,000 reais (approximately $6,300) tax-free every month has now been terminated, making every crypto gain taxable.

The 17.5% rate will generally apply to most financial investments, including fixed income securities, which will now incur a 5% tax rate on profits.

Interestingly, alongside this tax overhaul, Brazil is also pursuing various other legislative initiatives related to cryptocurrency, including a bill that would permit employees to receive a portion of their salaries in crypto.