Brazil Scraps Tax Break for Small Crypto Holders While Relieving Large Investors

From 12 June, a new flat 17.5% tax applies to any capital gains from selling a coin or a token, regardless of value or size, erasing the benefit previously enjoyed by individuals who sold up to 35,000 reais (USD6,300). 

Tax increase or relief

While many Brazilians who invest in digital assets may be smarting at the changes, more significant market participants will see their tax burden drop as a result. Larger transactions triggered a tiered system, beginning at 15% and reaching 22.5% for individuals or entities transferring more than 30 million reais per year.

Consequently, the new standardized figure of 17.5% reduces the burden for wealthy crypto investors by as much as 5% on certain sales.

Regional Player

The tax restructuring comes as Brazil has emerged as Latin America’s dominant cryptocurrency market. About 26 million Brazilians hold digital assets, according to data from Triple A, a crypto payment processing service. Some $90 billion flowed through Brazilian crypto transactions in 2024, Blockchain analytics firm Chainalysis has reported.

Salaries in crypto

As the region’s largest economy, it’s notable that the Brazilian government is actively pursuing broader crypto integration. Under a recently passed law, workers may opt to receive 50% of their salaries in crypto, while policymakers are currently deliberating the creation of a strategic Bitcoin reserve.

While the new tax may draw the ire of small investors, its implementation signals the growing maturity of Brazil’s crypto market, and the government’s recognition of its role within Brazil’s diverse economy.