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Episode #154: Brazil's Crypto Taxman Cometh with Daniel de Paiva Gomes
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Olá pessoal!
For this week’s episode I talk to crypto tax lawyer Daniel de Paiva Gomes about the sweeping changes proposed by Brazil’s Ministry of Finance earlier this month.
We explored the changes to the IOF financial transactions tax and the relevant implications, as well as the provisional measure released by the Ministry of Finance seeks to overhaul tax treatment of crypto assets in the country.
It’s important to note that, despite what many media outlets are reporting, the capital gains tax changes are just proposals at this stage and must be approved by Congress to take effect on January 1.
Are Stablecoins a “Loophole” Around IOF Tax? Separating Fact from Fiction
Daniel explained that there is some confusion around changes Brazil's IOF (financial transactions tax), with widespread misconceptions claiming cryptocurrencies — particularly stablecoins — enjoyed special exemptions. The reality is more nuanced: there was never a formal crypto exemption for these assets. Rather, virtual assets simply didn't fall under existing IOF definitions created in the 1960s—decades before cryptocurrency existed.
Key clarifications on IOF include:
* Domestic transfers of stablecoins remain outside IOF scope regardless of foreign currency denomination
* Cross-border payments using stablecoins may trigger IOF depending on implementation and when the assets are converted into fiat currency
* Nationalization costs for exchanges importing crypto assets already include IOF payments
* The recent IOF decree only increased nominal tax rates—it didn't create new crypto-specific taxes
Capital Gains Overhaul
The proposed provisional measure introduces a flat 17.5% capital gains tax across all crypto transactions, replacing the current dual system that treats offshore and domestic transactions differently.
While unification simplifies compliance, several provisions raise serious concerns for businesses and individual investors:
Critical Changes:
* Exemption elimination: The current R$35,000 monthly exemption for retail transactions would disappear. This would be the biggest impact to everyday crypto investors
* Quarterly reporting: Taxes must be calculated and paid every three months
* Limited loss offsetting: Losses can only be carried forward five quarters—inadequate for crypto market cycles
* Payment mechanism disruption: With the R$35,000 exemption scrapped, every crypto transaction triggers a taxable event. This effectively kills Brazil’s nascent crypto payment card industry (at least for users that intend to pay with cryptos other than stablecoins)
Corporate Tax Burden Increases
The CSLL (social contribution on net profits) will increase from 9% to 15% for certain financial entities, potentially affecting Virtual Asset Service Providers (VASPs) even before full regulation takes effect.
Daniel argues that this creates an uneven playing field where new crypto businesses face higher tax burdens than established financial institutions.
Ramifications and Next Steps
The proposed changes could drive users toward non-compliance and self-custody solutions, potentially reducing the overall tax base despite higher rates.
For international businesses, Brazil risks falling behind in the global comp
Published on 2Â months, 1Â week ago