Brazil’s Crypto Coup: Taxes Now Flatten Everyone—Rich, Poor, and Tragically Hopeful
In a seismic gesture of bureaucratic style—if not substance—Brazil has swept aside the dainty exemption for modest crypto dabblers and now demands a flat 17.5% tax on all capital gains from digital assets. The era of delicately sidestepping the taxman, provided one navigated under ₨35,000 monthly (which, oddly, never felt nearly enough for an honest bribe), is dashed by Provisional Measure 1303. Never before has one seen such egalitarian application—taxing the smallholder and oligarch with one sweep, a move at once heroic and hopelessly predictable.
Until this decree, those dabbling beneath the ₨35,000 threshold (roughly $6,300 for those who still think in civilised currencies) experienced a blissful window free from income tax, while proceeds above that amount were met with progressive rates, ranging from 15% (a polite request) to 22.5% (unmistakable daylight robbery—how positively municipal). The new regime scrubs away all such nuance: after June 12, everyone pays 17.5%, regardless of whether their trading is whimsical or a well-oiled scheme for yacht procurement.
Hearts, of course, must bleed for the modest investor—previously taxed in crumbs but now treated to an adult serving of government affection. Meanwhile, those for whom ₨5 million is a light lunch find reason to smile: where once their ill-gotten millions suffered up to 22.5% shearing, they now receive the selfsame flat rate as their poorer neighbours. Truly, the pursuit of equality is a wondrously uneven business.
Brazil targets self-custody and offshore crypto
The revels don’t end there: the Provisional Measure, in its boundless ambition, sweeps in not merely the coins one forgets under the mattress, but also those hidden with slightly more enthusiasm in self-custody wallets and foreign exchanges. The taxman, evidently, has acquired a taste for foreign cuisine.
Losses, rarely a topic for government sympathy, now offer some fleeting comfort—losses from the past five quarters may be used to offset quarterly taxation. A rare mercy, though, like all good things, destined for a shorter lifespan come 2026, when that window narrows with all the subtlety of a closing bank vault.
Meanwhile, the government refuses to be outdone by mere technical innovation. Fixed income products—once thought as untouchable as Oscar Wilde’s wit—are now beset by a 5% levy on profits. LCAs, LCIs, CRIs, CRAs: the full alphabet parade will now feature in the taxman’s favourite opera.
And in a stroke of whimsy or masochism, taxation on betting winnings leaps from 12% to 18%. One can only imagine the cheerful faces at Brazil’s racetracks—now, to lose one’s bet is merely financial; to win is to suffer a government deduction.
All this, of course, was preceded by the finance ministry’s quixotic attempt to raise the Financial Transaction Tax (IOF), a move met with the sort of resistance normally reserved for villainous opera characters or experimental theatre.
Brazil considers allowing Bitcoin salary payments
Never let it be said that Brazilian lawmakers lack style. In March, they suggested, with bohemian flair, that employers might pay workers partly in crypto—provided it remains no more than half a salary. The notion of total Bitcoin wages, apparently, is reserved for foreign workers and mystical contractual conditions better left to the imagination.
Naturally, contractors may wallow in digital largesse if all parties agree and Central Bank rates are invoked—or so says the draft bill, proving that even in matters of cutting-edge policy, bureaucracy remains the world’s oldest cryptocurrency.
the Brazilian government has done what governments do best—claimed its pound of flesh, redistributed confusion, and left investors to puzzle out whether to laugh, cry, or simply file their returns and await the next bout of official whimsy. 💸🤷♂️
Read More
2025-06-15 10:09