Previously, Brazilian residents who disposed of up to 35,000 Brazilian reals (approximately $6,300) in crypto assets every month were not subjected to income tax. Any gains beyond this limit were progressively taxed, starting at 15% and escalating to as much as 22.5% for volumes surpassing 30 million Brazilian reals.

The new flat rate, effective from June 12, eliminates all exemptions and uniformly applies to all investors, regardless of their transaction sizes, reveals a report by local news outlet, Portal do Bitcoin.

While this change implies higher taxes for smaller investors, wealthy individuals may end up paying less. Previously, huge trades exceeding 5 million Brazilian reals, were taxed between 17.5% and 22.5%. With the new 17.5% uniform rate, many large-scale investors will experience a decrease in their effective tax rate.

Brazil’s provisional measure also widens the tax base, now encompassing crypto assets held in self-custody wallets and offshore crypto holdings. Taxation will now be assessed on a quarterly basis, with investors allowed to offset losses from the preceding five quarters. However, this loss deduction window will be more stringent from 2026.

Brazil also has plans to allow Bitcoin salary payments. In March, Brazilian legislators proposed a bill that would allow employers to pay a portion of their employees’ salaries in cryptocurrencies such as Bitcoin (BTC). However, under these proposed rules, crypto payments should not exceed 50% of an employee’s salary. Full crypto payments would only be permissible for foreign workers or contractors, and only under specific conditions outlined by Brazil’s central bank.

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