Brazil has scrapped a long-standing tax exemption on cryptocurrency gains, with a new provisional measure (MP 1303), imposing a 17.5% tax on all crypto profits for individuals.
Previously, individuals selling up to R$35,000 (around $6,300) worth of crypto per month were exempt from taxation. Before the change, gains above that were taxed progressively, reaching as high as 22.5% for volumes over $5.4 million.
The new rule replaces this system with a flat tax, meaning smaller investors will face higher tax burdens while large holders may see their bills shrink, local news outlet Portal do Bitcoin reports.
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The tax will apply regardless of where the assets are held, including in overseas exchanges or self-custodial wallets. Losses can be offset, but only within a rolling five-quarter window, a rule that will become stricter starting in 2026.
The government says the overhaul is aimed at boosting tax revenue after walking back a proposed hike to the IOF financial transaction tax, which had drawn industry and congressional criticism.
Alongside crypto, the new measure affects fixed-income investments and online betting, with the former now incurring a fixed 5% tax on earnings and the latter seeing taxes on operator revenues rise from 12% to 18%.
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