Brazil Eyes Crypto Taxation Changes in New Bill

Brazil is planning to change the way how cryptocurrencies are being taxed. A new bill that deals with investment taxation for individuals will propose to change how crypto is considered, allowing it to be taxed similarly as shared and capital instruments with a variable exchange rate.

According to the proposal to be presented in the coming days to the National Congress, crypto investors will have to pay 15% of the income of the operations made with cryptocurrency. Today, cryptocurrency gains are taxed as goods and must pay capital gains tax depending on the volumes transacted, starting at 15% for volumes lower than 5 million reais ($990,000). Transactions over $30 million reais (close to $6 million) pay 22.5%, with lower tax percentages for intermediate volumes.

This tax regime applies to cryptocurrency and non-fungible tokens (NFTs) traded by investors who transact over 35,000 reais (close to $7,000) monthly in all platforms where they are registered. This value is higher than the lower limit for stocks, currently set at 20,000 reais (close to $4,000).

However, it is uncertain if the new bill will change these limits, allowing crypto investors to be exempt from paying taxes for trading small cryptocurrency amounts. The changes from the law are expected to be applied in 2025, but Congress needs to pass the law that has been in development for over a year.

This new tax regime is part of the increased oversight the Brazilian government has begun to exert on crypto. In February, the Brazilian crypto tax authority detected irregularities in over 25,000 cryptocurrency tax statements, combining traditional and artificial intelligence techniques to identify these problems.