Key Takeaways
- Brazil introduced a flat 17.5% capital gains tax on all bitcoin transactions, ending exemptions for small trades.
- The new regime includes self-custody and offshore bitcoin holdings, with quarterly tax assessments and narrowed loss deduction periods from 2026.
- Lawmakers are considering allowing partial salary payments in bitcoin, with strict limits and regulatory oversight.
Brazil has overhauled its taxation policy for bitcoin, ending the longstanding tax exemption on small-scale bitcoin profits and setting a uniform 17.5% capital gains tax.
The change, enacted under Provisional Measure 1303 and effective June 12, applies to all investors, regardless of transaction size.
Previously, Brazilian residents were exempt from income tax on bitcoin sales up to 35,000 reals (about $6,300) per month, with higher amounts taxed on a progressive scale from 15% to 22.5%.
Now, all gains are taxed at the same flat rate.
According to a report by Portal do Bitcoin, this shift means:
Smaller investors will now face higher tax burdens, while high-net-worth individuals could see their effective tax rate drop.
Brazil targets self-custody and offshore holdings
The new tax regime expands the base to include bitcoin held in self-custody wallets and foreign holdings.
Tax will be assessed quarterly, with investors allowed to offset losses from the previous five quarters, though this window will narrow in 2026.
The overhaul also introduces a 5% profit tax on fixed income products like LCAs, LCIs, CRIs, and CRAs, and raises the tax on betting revenues from 12% to 18%.
Lawmakers eye bitcoin salary payments
In March, lawmakers proposed allowing employers to pay workers partially in bitcoin, capped at 50% of an employee’s salary.
Full payment in bitcoin would be permitted only for foreign workers or contractors, with all payouts pegged to official exchange rates from Central Bank-authorized institutions.
