Brazil has scrapped a long-standing tax exemption on cryptocurrency features, with a brand new provisional measure (MP 1303), imposing a 17.5% tax on all crypto income for people.
Beforehand, people promoting as much as R$35,000 (round $6,300) price of crypto monthly have been exempt from taxation. Earlier than the change, features above that have been taxed progressively, reaching as excessive as 22.5% for volumes over $5.4 million.
The brand new rule replaces this method with a flat tax, which means smaller buyers will face larger tax burdens whereas giant holders might even see their payments shrink, native information outlet Portal do Bitcoin studies.
The tax will apply no matter the place the property are held, together with in abroad exchanges or self-custodial wallets. Losses might be offset, however solely inside a rolling five-quarter window, a rule that can grow to be stricter beginning in 2026.
The federal government says the overhaul is aimed toward boosting tax income after strolling again a proposed hike to the IOF monetary transaction tax, which had drawn trade and congressional criticism.
Alongside crypto, the brand new measure impacts fixed-income investments and on-line betting, with the previous now incurring a hard and fast 5% tax on earnings and the latter seeing taxes on operator revenues rise from 12% to 18%.
